Real Estate Investment Trusts REITs
REITs are very diverse, from both a property type and an instrument perspective. The properties in which REITs invest range across all industries and types, including office buildings, shopping centers, residential properties, industrial facilities, health care, lodging, warehousing, and new development. Furthermore, the instruments through which REITs gain exposure to these property types vary and include equity interests, commercial mortgages, and residential mortgages. It can be difficult to...
Qualitative Factors for Real Estate Investment
As is the case with other types of alternative investments, there are a series of qualitative factors that determine success in real estate investment. Real estate, more so than many other types of alternative investments, can be very dependent on local market considerations. For instance, the characteristics that are required to be successful in an urban area in Europe are very different from those that are required in a suburban Washington, D.C., market. Qualitative considerations include...
Real Estate Cash Flow
Funds invested in real estate have among the widest variety of investment structures of all alternative investments. Each of the closed-end, open-end, and direct investment structures for real estate has very different return, risk, and liquidity characteristics. These partnerships or funds also range in predictability of cash flows. However, compared with other alternative investment options, real estate tends to have the most regular cash flow features, as it pertains to current income if not...
Hedge Fund Cash Flow
Hedge funds can have various types of fund structures, including open-end funds, closed-end funds, and separate accounts. Hedge funds have no direct investment opportunities per se, as is found with private equity, real estate, and hard assets where there is an ability to directly invest in portfolio companies and properties. In terms of open-end fund structures for hedge funds, there are several subgroupings, including commingled private partnerships,1 registered investment companies (RICs),...
Qualitative Factor Determinants for Private Equity
Quantitative factors that can be attributed as determinants of private equity return and volatility are identified in Chapter 11. In addition to quantitative factors, there are unique qualitative factors that are involved in the determination of the performance and diversification merits of private equity. Although these qualitative factors cannot easily be modeled, they may at times be more important to the total return of a fund in this area than quantitative factors. Private equity...
