Class Differences in Real Estate Private Equity Fund Performance

Posted: 6 Apr 2016

See all articles by Lynn M. Fisher

Lynn M. Fisher

Mortgage Bankers Association

David J. Hartzell

University of North Carolina at Chapel Hill

Date Written: April 5, 2016

Abstract

Real estate private equity (REPE) funds are often differentiated by risk class: core, value-added, or opportunistic. Fund class is used by investors and managers to allocate funds and to describe investment policies. In this paper, we use REPE fund cash flow data from Burgiss that allow us to calculate a variety of performance metrics. For a subset of the data, we also observe characteristics of underlying fund holdings. Despite evidence that Value-Added and Opportunistic funds differ in investment composition, we show that class does not do a good job of predicting differences in performance. Unsurprisingly, greater investment in development (as assessed ex post), predicts poor performance for funds raised just before the Great Recession.

Keywords: Real estate investment; Private equity; Fund performance

Suggested Citation

Fisher, Lynn M. and Hartzell, David J., Class Differences in Real Estate Private Equity Fund Performance (April 5, 2016). Journal of Real Estate Finance and Economics, Vol. 52, No. 4, 2016, Available at SSRN: https://ssrn.com/abstract=2759446

Lynn M. Fisher (Contact Author)

Mortgage Bankers Association ( email )

1919 M Street NW
Washington, DC 20006-3404
United States

David J. Hartzell

University of North Carolina at Chapel Hill ( email )

Kenan-Flagler Business School
Chapel Hill, NC 27599-3490
United States
919-962-3160 (Phone)
919-962-0054 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
497
PlumX Metrics