Private Equity
Asset class guide
EducationAsset class guide
Private Real Estate
Private real estate raises capital to buy, develop or reposition property.
Introduction to private real estate
What you need to know
Structure
Closed-ended or open-ended fund, joint venture, or single-asset vehicle.
Strategies
Core, value-add, opportunistic and development.
Investors
Pensions, insurers, sovereign funds, family offices, private wealth.
Basis of the case
The assets, the market and the business plan for each.
How is private real estate raised?
Real estate is raised against the assets. The case rests on the plan for each one.
Strategies are usually grouped by the work involved and the return sought.
More work, higher target return
Core
Holds let, income-producing property.
Value-add
Improves an asset through capital works or new leasing.
Opportunistic and development
Takes on more work for a higher target return.
Which structures carry it?
Strategies that buy and hold income-producing property often use open-ended funds. Development and repositioning strategies more often use closed-ended funds or single-asset vehicles.
Open-ended funds
Often used to buy and hold income-producing property.
Closed-ended funds
More often used for development and repositioning.
Joint ventures and separate accounts
Many investors use them as well as funds.
Single-asset vehicles
Formed for a single asset or portfolio.
Who invests in private real estate?
Investors include pension funds, insurers, sovereign wealth funds, family offices and private wealth platforms. Many invest through joint ventures and separate accounts as well as through funds.
- Pension funds
- Insurers
- Sovereign wealth funds
- Family offices
- Private wealth platforms
Who does the capital serve?
Real estate capital pays for buildings to be bought, built and improved.
Homes, offices, warehouses and the places people work. Its investors include pension funds, insurers and sovereign funds, and a committee reads the plan for each asset with their members and policyholders in mind.
What do institutional allocators look at?
Allocators decide on evidence. We help you present it.
01
The assets and the plan
For each property or pipeline, the business plan, the capital required, and the assumptions behind the projected return.
02
Market and sector
Why this sector and this location, the balance of supply and demand, and how the plan holds if conditions change.
03
Execution record
What the sponsor has bought, built or repositioned before, at what scale, and how the results compared with the original plan.
04
Alignment and governance
How much the sponsor invests alongside investors, how the fees and the sponsor's share of profits are set, and who decides on purchases and sales.
Private Real Estate: the guide as a PDF
The same guide in print form, with the team and our contact details. For your own reading or to share with your partners.
Important information
For information only. This guide describes general practice in private real estate fundraising, which varies between managers and allocators. It is not an offer or solicitation to buy or sell any security, and it is not investment, legal or tax advice.
