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- September 1, 2013: Vol. 25, Number 8

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I beg to differ: Consolidation of investment firms will promote inevitable creep toward mediocrity

by Nori Gerardo Lietz

 

I listened to The Dohrmann Report podcast for July and heard Geoffrey Dohrmann make several interesting comments, but I want to focus on the ones he made regarding the indisputable consolidation in the investment management industry. Geoff quoted some fairly startling statistics, one of which was that the top 10 firms in terms of assets under management account for 53 percent of all investable institutional real estate assets. The top 25 firms account for 76 percent of total assets. He also mentioned that the number of firms sponsoring Institutional Real Estate, Inc. publications shrank from 48 to 13 between 1990 and 2000 because of consolidation.

I predicted a few years ago in my white paper I Will Survive that there would be a massive shift of assets away from the dinosaurs to other survivors who had better performance and who treated their clients as fiduciaries should. This happened after the real estate downturn in the early 1990s. I did not

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