A Comfortable Feeling: What Are the Pros and Cons for a Fund Manager Having “Skin in the Game”?
Since property prices peaked across most of Europe in 2007–2008, there has been an increase in co-invested property funds, club deals and joint ventures (JVs). Sufficient data is not yet available to assess whether this co-investment leads to outperformance or not, but as we will discover in this article there are other benefits to investors besides total returns.
Peter Hobbs, senior director for group business development at IPD, says “the demand for more JV deals is coming very much from the investor’s side because of scepticism over the (traditional) fund model. The bigger investors wanted more control over their investment and this has led to more club deals and co-invested vehicles,” he says. “Overall, the managers still tend to prefer traditional fund models that provide them with greater control over investment strategy and portfolio management.