The Government of Singapore Investment Corporation has hired Greenhill Cogent to sell a large portfolio of real estate fund interests, according to two people familiar with the matter.
The exact size of the portfolio hasn’t been determined yet but could total about $1 billion, one of the sources said. The transaction is expected to launch in the fall.
Greenhill Cogent declined to comment. GIC did not respond to requests for comment.
The secondaries market for real estate fund stakes is booming this year. In the first half of 2015, real estate secondaries volume was about $3 billion, compared with $4 billion for the whole 2014, according to a recent report from Greenhill Cogent, which anticipates that total volume for 2015 could be about $9 billion.
“While the sale of real estate funds in the first half of 2015 was driven primarily by North American pensions, foundations and endowments, we see increasing supply from LPs outside North America as well,” the advisory firm said in the report that came out on Wednesday.
“In nearly all cases, the motivation for a real estate sale is either over allocation to real estate or a desire to reduce exposure to non-core managers.”
At the end of June, CalPERS said it had hired Park Hill and planned to sell $3 billion of real estate portfolio to reduce the number of managers it is exposed to.
Some market participants are starting to express concerns that a surge in supply of real estate secondaries transactions may not all meet buyers.
“The question is how it’s getting absorbed because there’s not that much dry powder,” said one of the sources. “There’s more supply than demand.”