As pension funds and institutional investors have continued to increase their asset allocation to alternative assets in their search for returns, the pace of investment in real estate both directly and through structured products shows no sign of abating. The illiquid and non-traded nature of many of these property instruments including direct investments makes their valuation much more challenging.
This trend is further converging with the revolution of the fledgling property derivatives marketplace which has experienced rapid growth in the UK through the total return swap market. The market for securitization of mortgages in Europe and the UK is also set to explode over the next decade. Europe and the UK will securitize $500 billion of mortgage assets per annum for the next ten years all in their local currencies. These assets will provide pension funds and insurance companies across the EEC with a much needed portfolio diversification strategies.
GPE with its leadership in synthetic pricing is poised to service this market and accelerate its further growth by providing much needed independent fair market valuation services.
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