He told a panel at the INREV annual conference in Barcelona last week that investors are  worried about the potential for stagflation from major central banks' strategy of quantitative  easing - buying up sovereign bonds to inject liquidity into the banking system. Prupim has around £200bn in total assets under management, of which the soon-to-be M&G Real Estate is a principal investor for £17bn on behalf of Prudential and life assurance funds worldwide. It is also a multi manager for clients of Asian life insurance funds, and has just started investing US$1.5bn on their behalf. The group has core funds in all the world's regions, and also manages debt products mainly focused on mezzanine and 'stretched senior' lending.

Asked if real estate allocations are growing in general, Jeffrey, who joined the group last year in London after a spell as CIO for MGPA based in Singapore, said, "I would be cautiously optimistic on that," and he tended to agree that a general move is happening toward real assets in general. "Some 75% of our returns over the years have come from income and investors are currently pretty cautious so that they like to go into income producing assets."
Life insurance groups' interest in real estate is rising in general, with Asian life funds starting at around 7% allocation a few years ago and now up to about 10% of total AUM. "At the other end of the spectrum we are seeing a major upturn of interest in super funds," Jeffrey added. These seek assets with ultra long leases of 25 years-plus and index linked. "There is more demand than we can satisfy for that," he said. Target assets tend to be anything that has a long life such as grocery superstores and social infrastructure. "It needs to be inflation linked because investors don't want to take up too much risk… People are worried about stagflation from QE, and they are also interested in is debt funds because many people see a perfect storm brewing."

Separately, M&G announced that it has beefed up its Paris office to seek investments across Benelux and Nordic regions, and hired a new dealmaker for Germany as it extends its presence in continental Europe. Jeffrey said in a separate statement last week: “Scaling up our presence in France and Germany is part of PRUPIM’s strategic expansion as a global real estate investment manager, and follows the recent opening of offices in Tokyo and Seoul.” The group’s recent property deals in continental Europe total €113.4m and took assets there to €849m at end-2012. Prudential bought M&G Investments in 1999 and build it into one of the largest real estate investors in the UK. Flagship properties include 30 Berkeley Square in London’s West End and Europe’s largest shopping centre Bluewater just outside the British capital

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