Club deals are gaining momentum in an era when investors are putting a high priority on control and risk management. Because these types of co-investments are open to just a handful of investors at a time, many believe they offer a structural “happy medium” — one that offers the control of a separate account but provides the type of diversity available for smaller investors in a commingled fund. But, like any investment vehicle, the club deal doesn’t come with a guarantee that nothing will go wrong.
From the Current Issue
Following a global real estate downturn, it might be easy for investors to forget the discipline and benefits of maintaining a well-diversified real estate portfolio. And while we see near-term opportunities here in the United States, pursuing a narrow, U.S.-only strategy over the long term would concentrate economic and market risks within a single economy over a period when indications are that the U.S. economic cycle likely will lag other parts of the world, particularly the Asia Pacific region.
“Super bulk” distribution facilities — those covering 500,000 or more square feet — have been hot commodities for the past several years. But are they wise investments? As with any investment, there are plenty of pros and cons that should be weighed, especially because these buildings may represent a large concentration of risk. Investors should consider a number of factors before deciding whether increasingly popular super bulk buildings are right for their portfolios.
Ryan Garner, editor of The Institutional Real Estate Letter — North America, spoke with Chuck Carpenter, managing director, private markets, at the State of Wisconsin Investment Board (SWIB), to discuss how real estate investment strategies have changed since the downturn, the advantages of private equity over real estate and what the future holds for investment activity.
Like a rocket ship, our Fall Editorial Advisory Board meeting for The Institutional Real Estate Letter – North America is fast approaching (Aug. 30 – Sept. 1, 2010, at the Montage Hotel & Resort.)
The recession is pregnant with a new economy while it is burying the economy of the past. The nation and the world are going to expect much from the new economy, which will be very different from the old. The challenges to the new economy will go beyond the ubiquitous call for environmental sustainability. Equally, if not more importantly, the new economy must power up to provide more and better goods and services at prices that induce increases in effective demands. Only an economy with more powerful productive muscles than its predecessors can relieve the social tensions of unacceptable and great inequalities in wealth, both within and between nations.