Private Equity Investment Opportunities in Real Estate

Abstract

Although your fund may not be investing in real estate, you compete for funds against all classes of assets. The authors state the case for real estate and compare its performance with other asset classes. Real estate investments may appear attractive due to the following facts: Real estate comprises a large share of the universe of institutionally appropriate investments; real estate has a traditionally low return correlation with other major investment sectors, thereby providing diversification; and the historical yields from real estate investments have been high relative to stocks and bonds, especially when analyzing risk-adjusted returns. The authors detail a series of private equity investment strategies for real estate.