Hey WSO,
One thing I’ve not found much literature on is the concept of open vs. closed end real estate funds.
Aside from the obvious details that closed end funds have a finite life and therefore are (most likely) IRR driven, what other details are relevant? Where do these vehicles fall on the risk spectrum? Seems like they are more so passive, ultra core investments. But who are the players? How common are they? What kind of strategies do you see at work? What are the levers of the fund structure? Would love to hear the WSO insight.
Thanks in advance.
https://www.omm.com/resources/alerts-and-publications/publications/open…
Google
I have always looked at is as open-ended funds give investors liquidity, ability to sign on and off. Also gives funds managers the ability to bring on additional capital while the fund is still active.
Sucks for the manager when you get hit with a bunch of redemptions all at once because folks got cold feet and now you have to sell assets that you want to hang onto. i.e. Heitman and Barings late last year...
Thanks. As I mentioned, I've read what's available on Google - the point is that I'm looking for additional color on the universe, history, and structure.
LReed, is there any reason the closed-end fund is for value-add / capital gains driven or could an open-end fund be just as sufficient? And same for a closed fund with an income investing approach? Does it only have to do with sourcing of capital and funding or is there something else?
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