Property is a quintessential asset class for the return-seeking investor. Meanwhile, those predicting an end to zero interest rates may also appreciate its inflation hedging characteristics. But none of this explains the phenomenon of ‘private real estate’ invested through relatively expensive closed-end funds, when cheaper and more liquid structures are available.
The answer, as ever, lies in the details and these are facilitated by Pevara. It seems that what managers may lose in structural efficiencies, they gain in freedom, creativity and strategic specialisation. In addition, a deep dive into US versus European private real estate shows surprising geographic diversity even within the sub-asset class. Our conclusion is something that every investor considering the sector should read.
It’s another example that, when it comes to private markets, the generic labels of portfolio theory will only get you so far.
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Download > Core real estate: a comparative perspective