Real estate strategy
Introduction
In finance, private equity real estate (in English: Private Equity Real Estate) is considered an asset class consisting of investment in equity or debt with underlying real estate. These investments usually involve an active management strategy from a moderate repositioning of the asset, real estate rental, to the development of real estate developments or large urban areas.
Investments are usually made through real estate private equity funds, which are collective investment structures that pool capital from different investors. These funds usually have a duration of ten years distributed over 2-3 investment years, during which asset acquisitions are made, and asset management periods in which value is created through active management until it is finally realized during the last two years, usually called the liquidation period.
History and Evolution
There is a long history of institutional investment in the real estate sector, both through direct and indirect investment, through funds and/or investment vehicles. At first, institutional investment was carried out only with a "core" strategy; when market conditions changed in the 1990s, the so-called opportunistic funds and Value Added funds began to emerge, aimed at taking advantage of the opportunities that the fall in real estate prices offered, acquiring assets at relevant discounts and creating value in them through active management. Real estate private equity emerged as a standalone asset class at the turn of the century and has seen tremendous growth in recent years.
Levels in the management of Real Estate Private Capital
Within real estate investment management we identify three levels: capital management, asset management and real estate management itself.
• - Capital Management or also called Fund/Investment Management: With a more strategic vision, the fund manager is in charge of the main issues related to investors and investments: structuring of the fund, definition of corporate governance, relations with investors, acquisitions and sales of assets, administration of the fund from launch to liquidation.