Sven Schaltegger on the Multi-Manager Real Estate Business

The head Multi-Manager Real Estate Business explains: "Our goal is to offer investors very broadly diversified exposure to global real estate investments via a single investment.”

November 2, 2023

Sven Schaltegger

Head of the multi-manager real estate business

You’re responsible for the multi-manager real estate (MMRE) business at Credit Suisse Asset Management. What exactly does your unit do?

Our goal is to offer investors very broadly diversified exposure to global real estate investments via a single investment. In our area, we focus explicitly on real estate outside of Switzerland. We work with best-in-class partners, as the real estate business is a very local business wherever you are in the world. The local presence of our partners – the “boots on the ground” – as well as their knowledge of local customs and sector expertise are essential selection criteria for us.

Many institutional investors are still underweight when it comes to “non-Swiss real estate” as an asset class. Will that change?

In Switzerland, pension funds are permitted to invest a maximum of 30 percent in real estate, of which a maximum of 10 percent may be abroad. The share of real estate is around 24 percent, so it’s already relatively high. International real estate accounts for less than 3 percent. Given the clear benefits that this sector offers for diversification and potential returns, it would be desirable and advisable to increase this low proportion.

"Our goal is to offer investors very broadly diversified exposure to global real estate investments via a single investment." Sven Schaltegger, head of the multi-manager real estate business

Let’s look at the US, the world’s largest real estate market and the biggest component in your MMRE portfolios. What’s the situation there?

The US is the largest and most liquid real estate market in the world. No other country has a greater selection of managers and funds, and the size of the market means that even sectors that are only niche in Europe and Asia-Pacific are relatively large and liquid. From the very beginning, we have invested in logistics properties in the US, which benefited from the strong e-commerce boom there, much earlier than in Europe. This happened even before the COVID-19 outbreak, but during the pandemic in particular. Since the sharp rise in inflation at the beginning of 2021, our US exposure has benefited because many rental agreements are directly or indirectly linked to inflation. For example, unlike in Europe, there are 12-month contracts for rental apartments in the US. After this time, the landlord can increase the rent if the supply/demand dynamics allow, which was clearly the case in our target markets. Rental accommodation, especially in the affordable price segment, is the second overweight in our MMRE portfolios. In the US, we have a variety of investments in the area of rental accommodation; in addition to traditional multi-family dwellings, which we hold primarily in the high-growth southern states, we also include manufactured housing. These are residential units of approximately 50 to over 100 square meters, which are very affordable and give people the opportunity to live in good communities. (See the case study on manufactured housing)

When will the situation stabilize again?

We assume that there will be further devaluations until the fourth quarter of 2023, but they will have less of an impact than before. Overall, there have been fewer transactions since the interest rate reversal in the first quarter of 2022, which is completely normal in a market that is changing so rapidly. Now we are seeing that the expectations of buyers and sellers are starting to converge and the market is becoming clearer.

Global Real Estate

Credit Suisse Asset Management is a leading provider of real estate investments. 
Our broad array of real estate solutions spans a range of geographies and
investment types.

What’s your opinion about the current international market?

Most sectors and regions have bottomed out. The office market is certainly the sector that has suffered the most over the past few years. Working from home and the technologies associated with it allow us to work from almost anywhere. As a result, the structural demand for office space is likely to decline by around 20–30 percent, which has led to some sharp devaluations, particularly for office properties that no longer meet the requirements of today’s tenants. 

Our portfolios will continue to focus on the two high-conviction topics of logistics and accommodation and the respective sub-sectors, including last-mile logistics and industrial outdoor storage, as well as smaller sectors that benefit from structural trends such as self-storage and student accommodation.

And in Switzerland?

The Swiss real estate market has developed in an extremely stable and positive manner for a very long time. But the first cracks are now appearing in this system. In principle, this is due to the same reasons as those seen abroad, though the impact is not as pronounced and is delayed: Interest rates have risen, which has a negative impact on valuations. And, for office real estate, the value of premium properties in top locations is diverging sharply from that of other properties, as we have seen in most international markets since the outbreak of the COVID-19 pandemic.

"In Europe in particular, however, it’s always important to keep abreast of existing and possible new regulations when it comes to residential investments." Sven Schaltegger, head of the multi-manager real estate business

Which real estate segments and countries are currently worth investing in?

The real estate sectors that benefit from structural trends are logistics buildings and related sub-sectors such as industrial outdoor storage and data centers. Demand for retirement accommodation and student housing is also rising. In addition to a general lack of student housing, two factors come into play in this sector: First, more students enroll at universities when the economic situation is difficult. Second, many people now feel a need to be closer to others, which makes living near the campus very attractive. This is a major factor in Europe, the US and Australia as well. Rental housing in general is a stable sector, and the supply of affordable rental apartments is significantly lower than demand in many major Western European cities, both on the continent and in the UK, and also in high-growth regions of the US. Rental apartments in these urban centers therefore benefit from highly stable cash flows. In Europe in particular, however, it’s always important to keep abreast of existing and possible new regulations when it comes to residential investments.

Where are the opportunities and the risks for investors now?

The opportunities for investors lie in strong repricing as a result of the interest rate reversal. The trick now is to identify what can be purchased cheaply over the next one to two years, and also to see what will gain in value again in the foreseeable future. Periods of high appreciation driven by low interest rates are likely to be over for the time being. However, the interest rate situation is expected to normalize, as inflation figures are slowly weakening. In this environment, fundamental factors, particularly the relationship between supply and demand for space, which determines the extent to which rents will rise, are once again becoming key drivers of returns. Due to the strong performance of logistics and residential real estate over the last few years, we are seeing a short-term increase in the supply of new space in some markets. However, the sharp rise in interest rates has led to a dramatic decline in building permit applications, meaning that the supply of new properties will fall sharply in the next 12 to about 18 months, which in turn is likely to have a positive impact on rent growth and thus on real estate valuations.

Even though it is practically impossible to determine in advance when real estate assets have bottomed out, in our view and based on numerous discussions with our partners, many factors indicate that now is a very good time to start investing. 

"It’s a good time to invest in a new or existing, broadly diversified foreign portfolio." Sven Schaltegger, head of the multi-manager real estate business

What would you advise investors at the moment?

It’s a good time to invest in a new or existing, broadly diversified foreign portfolio. We give clients the opportunity to invest in a portfolio that is currently very well positioned and will continue to benefit from the structural trends I mentioned earlier. 

Where do you get the information you need to assess the individual market segments?

We have around 50 existing investments worldwide with almost 40 different partners,1 all of which have strong sector expertise and a direct local presence, so in the markets in which the real estate is located. There is also a peer group for each partner, meaning other fund managers or local operating partners that operate in the same market and sectors, and we are in regular contact with them. We receive reports on their funds every quarter, allowing us to compare the existing investments directly. In addition, we can draw on internal research which contains raw data from third-party providers that are independent of our partners. This data comprises vacancies, rental levels, rent growth, or new space that is coming onto the market, and enables us to objectively assess whether a market is attractive or not. We have further options for comparing prices and returns, or the rental level specified by the partner, as well as numerous qualitative factors, of course. 

What characteristics should you have to be successful as a provider of real estate funds?

You need to have a very good understanding of your particular market and sector. Geographical and sectoral specializations are therefore a great advantage. Along the risk-return spectrum, it’s not always good for a partner to do everything: if you are good at development, you may not be equally good at inventory management and vice versa. Expertise and a solid track record are required. At the same time, each fund manager’s track record is highly individual, as every property is different. We also look at the market environment – has the partner developed in line with the market? Are the people who were responsible for the company’s success still there? We carefully review quantitative and qualitative factors prior to each investment and as part of our ongoing monitoring of existing investments, and then use this as the basis of our decision on whether or not to invest. 

What personal values do you bring to your everyday work?

In addition to my role as the portfolio manager responsible for our multi-manager real estate products, I am primarily a coach and sparring partner for my team, which consists of five investment managers and one colleague who handles business management. I think what I bring to my role in terms of personal values is a keen interest in global affairs and a profound fascination with real estate that I’ve had since my first job in this sector back in 2000. I also have the necessary ambition to ensure our investors achieve the best possible performance within the defined investment strategy while taking ESG objectives into account. The trust of our investors over the past seven years since the launch of CSA 2 Multi-Manager Real Estate Global in October 2016, as well as the pleasure of working with my team, have motivated me time and again in the more challenging periods over the past few months.

CSA 2 Multi-Manager Real Estate Global2
Performance Comparison with competitors3

Source: Credit Suisse / Last data point: December 31, 2022 (unless otherwise stated)

Investment possibilities

Find investment products that suit your personal needs. Choose from our extensive range of investment solutions across all major asset classes, and access all product-related information.

You can also follow a fund and receive the monthly factsheet quickly and easily.


Get in touch with Asset Management

Contact us to learn about exciting investment opportunities. We are here to help you achieve your investment goals.

1 These figures relate to the entire CSAM MMRE platform.
2 Some performance data has been adjusted to take into account the product-specific management fees and the various currency strategies. The performance data for the unhedged products has been adjusted for hypothetical currency hedging costs. The return for the investment group was calculated using the modified Dietz method until June 30, 2022. From this date, the return has been calculated based on the percentage change in the net asset value of the share class.
3 The peer comparison is not an exhaustive list of competitors. The multi-manager real estate products that are viewed as the key competitors of the strategy were selected. There may be other multi-manager products on the market that have not been included in this comparison. The peer comparison is not intended to compare all of the features of the selected multi-manager real estate products.

To the extent that these materials contain statements about the future, such statements are forward looking and are subject to a number of risks and uncertainties, and are not a guarantee of future results or future performance.

The CSA 2 Multi-Manager Real Estate Global investment group invests in a globally diversified portfolio of non-listed real estate funds using an active selection process. The investment group pursues a core+ investment strategy, investing primarily in funds that pursue a core + investment strategy and thus generate long-term, stable cash flow from rental income. To a lesser extent the investment group invests in value-added and opportunistic real estate funds which strive to achieve attractive risk-adjusted returns. The reference currencies for the investment funds in which the investment group invests are mostly hedged against the CHF under normal circumstances.

Potential risks
Investing in the group involves various risks. For example, the investment group's performance depends in particular on the performance of the investment vehicles. In the event of unfavorable performance by the investment vehicle, investors face the risk of losing some or – in a highly unlikely scenario – all of their capital invested. Investors are informed of the key risks below.

  • If an investor fails to comply with a capital call, the foundation may employ certain measures and take legal action against the investor. 
  • Limited liquidity compared to listed investment products. 
  • The value of the investment vehicles may fluctuate (e.g. due to unfavorable changes in the economic environment, interest rate developments, or unfavorable local market conditions). 
  • Risks associated with the purchase, financing, ownership, operation, and sale of real estate. 
  • Legal and tax risks associated with investing in the investment vehicles. 

Please be advised that the information in this section is not exhaustive. For further details of other risks, please refer to the investment group prospectus.

This is a marketing communication. Please refer to the prospectus/information document of the fund and to the KIID/KID (as applicable) before making any final investment decisions.

CREDIT SUISSE AG, CREDIT SUISSE (Switzerland) Ltd., Part of UBS Group
Source: Credit Suisse, unless otherwise specified.
Unless noted otherwise, all illustrations in this document were produced by Credit Suisse AG and/or its affiliates with the greatest of care and to the best of its knowledge and belief.

This material constitutes marketing material of Credit Suisse AG and/or its affiliates (hereafter "CS"). This material does not constitute or form part of an offer or invitation to issue or sell, or of a solicitation of an offer to subscribe or buy, any securities or other financial instruments, or enter into any other financial transaction, nor does it constitute an inducement or incitement to participate in any product, offering or investment. This marketing material is not a contractually binding document or an information document required by any legislative provision. Nothing in this material constitutes investment research or investment advice and may not be relied upon. It is not tailored to your individual circumstances, or otherwise constitutes a personal recommendation, and is not sufficient to take an investment decision. The information and views expressed herein are those of CS at the time of writing and are subject to change at any time without notice. They are derived from sources believed to be reliable. CS provides no guarantee with regard to the content and completeness of the information and where legally possible does not accept any liability for losses that might arise from making use of the information. If nothing is indicated to the contrary, all figures are unaudited. The information provided herein is for the exclusive use of the recipient. The information provided in this material may change after the date of this material without notice and CS has no obligation to update the information. This material may contain information that is licensed and/or protected under intellectual property rights of the licensors and property right holders. Nothing in this material shall be construed to impose any liability on the licensors or property right holders. Unauthorised copying of the information of the licensors or property right holders is strictly prohibited. Information on your local distributors, representatives, information agent, paying agent, if any, and your local contacts in respect of the investment product(s) can be found below. The only legally binding terms of any investment product described in this material, including risk considerations, objectives, charges and expenses are set forth in the prospectus, offering memorandum, subscription documents, fund contract and/or any other fund governing documents. For a full description of the features of the products mentioned in this material as well as a full description of the opportunities, risks, and costs associated with the respective products, please refer to the relevant underlying securities prospectuses, sales prospectuses, or other additional product documents, which we will be pleased to provide to you at any time upon request. The investment promoted in this marketing material concerns the acquisition of units or shares in a fund and not of any underlying assets. The underlying assets are owned by the fund only. This material may not be forwarded or distributed to any other person and may not be reproduced. Any forwarding, distribution or reproduction is unauthorized and may result in a violation of the U.S. Securities Act of 1933, as amended (the “Securities Act”). The securities referred to herein have not been, and will not be, registered under the Securities Act, or the securities laws of any states of the United States and, subject to certain exceptions, the securities may not be offered, pledged, sold or otherwise transferred within the United States or to, or for the benefit or account of, U.S. persons. In addition, there may be conflicts of interest with regards to the investment. In connection with the provision of services, Credit Suisse AG and/or its affiliates may pay third parties or receive from third parties, as part of their fee or otherwise, a one-time or recurring fee (e.g., issuing commissions, placement commissions or trailer fees). Prospective investors should independently and carefully assess (with their tax, legal and financial advisers) the specific risks described in available materials, and applicable legal, regulatory, credit, tax and accounting consequences prior to making any investment decision. The alternative investment fund manager or the (UCITS) management company, as applicable, may decide to terminate local arrangements for the marketing of the shares/units of a fund, including terminating registrations or notifications with the local supervisory authority. There is currently no universal definition or exhaustive list defining the issues or factors that are covered by the concept of “ESG” (Environmental, Social, Governance). If not indicated otherwise, 'ESG' is used interchangeably with the terms 'sustainable' and 'sustainability'. Unless indicated otherwise, the views expressed herein are based on CS' own assumptions and interpretation of ESG at the time of drafting. CS' views on ESG may evolve over time and are subject to change. The impacts of sustainability risks are likely to develop over time and new sustainability risks may be identified as further data and information regarding sustainability factors and impacts become available and the regulatory environment regarding sustainable finance evolves. These developments may entail the risk of reclassification under the CS Sustainable Investment Framework. An ESG assessment reflects the opinion of the assessing party (CS or external parties such as rating agencies or other financial institutions). In the absence of a standardized ESG assessment system, each assessing party has its own research and analysis framework/methodology. Therefore, ESG assessment or risk levels given by different assessing parties to the same [investment/company/product] can vary.  Further, ESG assessment is limited to considering company performance against certain ESG criteria only and does not take into account the other factors needed to assess the value of a company. Unless this has been explicitly communicated in the product or service documentation, no representation is given as to whether the product or service meets any specific regulatory framework or CS’ own criteria for internal sustainability frameworks. The non-financial / ESG-performance is independent of the financial performance of the portfolio or the product. The performances depend on various factors and may differ significantly. Inclusion of ESG factors in investment strategy does not guarantee a positive sustainability impact or does not necessarily result in successfully identifying and mitigating all material sustainability risks. The Product Sustainability classification of products and services in this document reflects the opinion of CS based on the CS Sustainable Investment Framework. In the absence of standardized, industry-wide ESG classification system, CS has developed its own ESG framework. Therefore, CS' Product Sustainability Classification can vary from classification made by third-parties. Given the nascent nature of ESG /sustainability regulation and guidelines, CS may need to review the representation that is made in this document regarding the Product Sustainability classifications/descriptions in response to evolving statutory, regulatory or internal guidance or changes in industry approach to classification. This is true for Product Sustainability classification/description made by CS and third-parties. As such, any Product Sustainability classification/description referenced in this document is therefore subject to change. The impacts of sustainability risks are likely to develop over time and new sustainability risks may be identified as further data and information regarding sustainability factors and impacts become available and the regulatory environment regarding sustainable finance evolves. These developments may result in a potential reclassification of products/services under the CS Sustainable Investment Framework. In addition, due to the evolving nature of regulations, references to relevant regulations [such as SFDR] , may need to be reviewed in the future and are subject to change. In assessing the portfolios of the funds listed in this document, the funds and their Manager may be dependent upon information and data obtained through third parties that may be incomplete, inaccurate or unavailable. This applies in particular for certain investments for which CS may only have limited access to data from external parties in respect of the underlying constituents of an investment, due to, e.g., absence of look-through data. In such cases, the fund’s manager will attempt to assess such information on a best-effort basis. Such data gaps could result in the incorrect assessment of a sustainability practice and/or related sustainability risks and opportunities. Sustainability-related practices differ by region, industry and issue which evolve accordingly. An investment's sustainability-related practices or the assessment of such practices by the fund managers may change over time. Similarly, new sustainability requirements imposed by jurisdictions in which the fund manager does business and/or in which the funds are marketed may result in additional compliance costs, disclosure obligations or other implications or restrictions on the fund or on their managers. Under such requirements, the fund managers may be required to classify themselves or the funds against certain criteria, some of which can be open to subjective interpretation. The funds managers' and/or CS' views on the appropriate classification may develop over time, including in response to statutory or regulatory guidance or changes in industry approach to classification, and this may include making a change to the classification of the fund. Such change to the relevant classification may require further actions to be taken, for example it may require further disclosures by the funds' manager or the funds or it may require new processes to be set up to capture data about the funds or their investments, which may lead to additional cost. This document and the information contained therein shall not constitute, nor be interpreted as, any promotion by CS that the [product/service] is considered a sustainable [product/service] under the CS Sustainable Investment Framework. Investors shall note that the fund is not a sustainable fund, nor is integrating any environmental, social and governance (ESG) considerations into its investment process. The fund does not meet any specific client or investor sustainability preferences. No representation is given as to whether [the product/service] meets any specific regulatory framework (including without limitation any SFDR requirements) or CS’ own criteria for internal sustainability frameworks.
Copyright © 2023 CREDIT SUISSE. All rights reserved.

Representative: Credit Suisse Funds AG1, Uetlibergstrasse 231, CH-8070 Zurich I Paying Agent, Distributor: Credit Suisse (Switzerland) Ltd., Paradeplatz 8, CH-8001 Zurich I Distributor: Credit Suisse AG, Paradeplatz 8, CH-8001 Zurich I Distributor: Credit Suisse Asset Management (Switzerland) Ltd., Kalandergasse 4, CH-8045 Zurich I Language versions available: German, English, French, and/or Italian I Supervisor (Entity of Registration): Swiss Financial Market Supervisory Authority (FINMA)
Management Company (Fondsleitung): Credit Suisse Funds AG1, Uetlibergstrasse 231, CH-8070 Zurich I Custodian, Distributor: Credit Suisse (Switzerland) Ltd., Paradeplatz 8, CH-8001 Zurich I Distributor: Credit Suisse AG, Paradeplatz 8, CH-8001 Zurich I Distributor: Credit Suisse Asset Management (Switzerland) Ltd., Kalandergasse 4, CH-8045 Zurich I Language versions available: German, English, French, and/or Italian I Supervisor (Entity of Registration): Swiss Financial Market Supervisory Authority (FINMA)
Distributor: Credit Suisse Asset Management (Switzerland) Ltd. I Kalandergasse 4 I CH-8045 Zurich I Language versions available: German, English, French, and/or Italian | Emittent and Management Company for CSA-Products: Credit Suisse Fondation 2, Kalanderplatz, CH-8045 Zurich

1 Legal entity, from which the full offering documentation, the key investor information document (KIID), the fund rules, as well as the annual and bi-annual reports, if any, may be obtained free of charge.
2 Legal entity from which the statutes, regulations, investment guidelines, and most recent annual report or fact sheets on CSA products can be obtained free of charge.