EUROPE - INREV, the European Association for investors in non-listed real estate funds, has introduced a ‘style' index to help pension funds and institutional investors can benchmark their funds by investment style.

Speaking at the INREV conference in Instanbul, Turkey, Andrea Carpenter, research director, said a style sub-index has been introduced as part of the fund data service which breaks assets into core, value-added and opportunistic funds, based on how managers classify themselves.

"We are working on a revision to our style framework, which will come out in a couple of weeks. But we have launched this because investors want that peer group to benchmark against. We eventually hope to develop further indices, so we can offer, for example, a core Spanish retail benchmark," added Carpenter.

Data from 2007 performance showed 144 funds labelled as ‘core' offerings generated a negative return of -4.7% last year, while that amount dropped to -3.1% on the 60 value-added funds but 15 opportunistic funds did return 20.1%.

INREV officials were again keen to stress the huge gap between returns was largely driven by the drop in returns in the UK real estate market in 2007 as well as the impact of currency conversions from the dollar and sterling into the euro. (See earlier IPE story: European property returns hit by currency pressure)

That said, delegates at the conference yesterday debated whether the returns and risk profiles of funds were strong enough in many cases to define funds as either core or value-added in particular, as well as questioning whether value-added funds essentially delivering ‘core' returns could charge the higher fees usually associated with value-added real estate investments funds.

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