Following Europe’s sovereign debt crisis, a swathe of smaller fund businesses were disbanded, consolidated or ruthlessly cut back. Some even questioned the relevance of the real estate fund, and we battened down for a period of survival of the fittest. In 2013, though, we witnessed a complicity of positive trends transform the prospects for real estate funds in Europe. A new fund industry is emerging from the ashes of the old.

Four key influences underlie the revival: new money, the growing unattractiveness of prime real estate yields, a belated recognition of Germany’s importance and the growth of “specialist” funds (I would like to ban the use of “alternative” in this context).

In the past year, we have witnessed new money coming into Europe, especially from liability-matching investors seeking income returns no longer available from bonds and equities in the United States or Asia. This phenomenon has resulted in a new class of foreign “virgin” real e