Major institutional investors have put their weight behind the updated Due Diligence Questionnaire launched by INREV.
PGGM, APG, Gothaer Asset Management AG, Generali Deutschland Immobilien GmbH and Allianz are among INREV investor members who have pledged to continue to use the revised standard questionnaire in their fund evaluation processes.
The Questionnaire assists investors at the early screening stage of the fund due diligence process. It helps them understand initial information about a fund manager's structure, strategy and real estate business and also a specific fund's strategy, processes, management, terms and projected performance.
The Questionnaire has been revised as the downturn has highlighted the need for increased information for investors on topics such as fund manager history and track record, risk management, debt management and conflicts of interest.
"The last two years have seen the market for non-listed property funds change considerably and we now take lessons learnt from that period into the due diligence stages for future investments. To have these topics better incorporated into the Due Diligence Questionnaire supports the right exchange of information at the screening stage.
"It is now important for all investors to support the use of this Questionnaire to help streamline and standardize the process for both investors and fund managers," said Michael Morgenroth, INREV Chairman and Management Board Member, Gothaer Asset Management AG.
Matthew Ryall, Head of Indirect Investments, Allianz said: "The Questionnaire has removed many of the bottlenecks from the due diligence process and raised the quality of information available for review. It forms an important part of our evaluation process and we support its use by fund managers."
The review of the Questionnaire was undertaken by the INREV Due Diligence Committee supported by Deloitte. Members were consulted throughout the process on the proposed changes and a workshop was also held on the topic to gather members' views.
The Questionnaire includes a section on sustainability to reflect the growing interest in this topic. It also supports the disclosure of fund manager's plans to adhere to the INREV Guidelines.
"The changes to the Questionnaire reflect not just issues raised by the downturn but also fresh topics being considered in the industry such as how to incorporate sustainable practices into non-listed property funds. Raising it at the due diligence stage results in this important topic being part of the investor and fund manager dialogue for all funds," said Deborah Lloyd, partner in the Funds and Indirect Real Estate group at Nabarro and Chair of the INREV Due Diligence Committee.
The updated Questionnaire is available on INREV's website in PDF and Word format. A version of the Questionnaire which 'tracks changes' from the original to support the transition is also available.