Real Estate Fund Management

Seminar paper from the year 2013 in the subject Business economics - Banking Stock Exchanges Insurance Accounting Cass Business School language: English abstract: This essay examines the ability of investors to take desired positions in the risk-reward space by building a portfolio of non-listed funds of different investment styles. The question is examined from the viewpoint of a major institutional investor not subject to meaningful capital constraints. While it is acknowledged that there might be significant practical barriers when implementing the desired portfolio strategy the essay focuses on the basic theoretical viability. The latest research on non-listed property fund performance was drawn upon. Furthermore data from the Association of Real Estate Funds (AREV) the European Association for Investors in Non-Listed Real Estate Vehicles (INREV) and the Investment Property Databank (IPD) was used for illustrative purposes. To begin with a brief introduction to non-listed funds and the concept of risk and reward is given. Subsequently the methodologies applied by AREF and INREV to classify non-listed property funds are illustrated. Thereafter the historic performance achieved by different styles is discussed. Then factors determining the INREV style classifications are compared with the performance drivers identified by recent research. The findings are summarized in the last section.