Real Estate Funds

Investigating the relationship between capital structure and the performance of non-listed real estate funds: focusing specifically on the role of leverage in hedging against inflation
15 Feb 2017

A panel data regression analysis was undertaken on a unique, unbalanced panel of APAC non-listed real estate funds to determine the role of leverage in hedging against actual and unexpected inflation with a focus on core funds. There is evidence that APAC non-listed real estate funds provide hedging against inflation and that the use of debt enhances their hedging capabilities. Furthermore, the results show that while leverage enhances a fund’s inflation hedging capability at moderate levels, its benefits are not unrestricted. The results imply that investors can extract information about inflation hedging abilities of non-listed real estate funds from capital structure data, promoting efficient investment decisions. The significance of the results may be influenced by the size of the dataset (119 APAC non-listed real estate funds invested in more than 10 countries across the three styles over the period of 2006-2014).

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Fund Manager Survey 2016
May 2016

According to the latest ANREV, INREV and NCREIF Survey of real estate fund managers, total real estate assets under management (AUM) reached US$2.19 trillion in 2015. Overall, the 10 largest fund managers represent 41.0% of the total AUM, up from 36.5% last year. The survey found:

  • Real estate assets under management grew to US$2.19 trillion
  • The big managers keep getting bigger
  • North American and global strategies are much larger than other strategies

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What To Look For In Unlisted Real Estate Funds

In the current low interest rate environment, the hunt for yield is a powerful force. Non-residential real estate via listed real estate investment trusts (A-REITs) and unlisted real estate funds (syndicates) have both benefitted from strong investment inflows.

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