Top reasons private equity real estate funds are an attractive prospect

A recent survey of high net worth investors representing $51 billion in assets showed that they had 33 percent of their portfolio in average allotted to private real estate investments, which is a record high. Private equity real estate funds have maintained their appeal through the year, providing a wealth of opportunities. Here are some reasons they remain viable prospects today.

Sustainable fee structure

Thanks to the steady flow of cash into private equity real estate, well-managed private equity funds can eliminate added fees as they act as a real estate operator. This means investing in properties directly as well as personally serv

ing investors instead of using a middleman. Achieving various investing goals They seek to achieve alpha, or the difference between a fund’s expected returns based on its beta and actual returns (and sometimes deemed as the value that a portfolio manager adds). They do so via strategic business plans for properties and skilled asset manager. The objective is to find topnotch, underperforming real estate properties that can be turned around. Investors’ role Private equity deals usually pay managers only after the investor makes money, with some firms often compensating their real estate managers based on performance. This puts their investment partners first, even giving them tax benefits such as depreciation and capital that returns in the form of long-term gains.

Minimized risk exposure

Private equity funds can be a hig