During the recent growth phase, the primary concern of fund managers and investors was to pool new vehicles; today, both are faced with the requirement to manage existing portfolios and vehicles. One important lesson learned in fund selection — and an aspect that has gained in significance — is that the structure and composition of the investor base counts. In times of scarce liquidity, limited market growth and shifting fund strategies, investors in a pooled fund may have divergent interests, which become unmistakeable in difficult market conditions. Consequently, an analysis of the investor base is essential before investors decide to commit to long-term, unlisted real estate funds.

RAPID CHANGE

During the boom years, unlisted real estate funds experienced massive growth in terms of capital flows. As evidence, according to INREV, the number of funds in Europ