Tuesday, June 29, 2010

Private equity real estate


In investment finance, private equity real estate is an asset class consisting of equity and debt investments in property. Investments typically engage an active management strategy ranging from moderate reposition or releasing of properties to development or widespread redevelopment.
Investments are typically made via private equity real estate fund, a collective investment scheme, which pools capital from investors. These funds typically have ten year life span consisting of a 2-3 year investment period during which properties are acquired and a holding period during which active asset administration will be carried out and the properties will be sold.

If a private equity real estate firm can't find inappropriate investment opportunities, it will not draw on an investor's commitment. Given the risks associated with private equity real estate investments, an investor can lose all of its investment if the fund performs badly.

The popularity of private equity real estate funds has grown since 2000 as an increasing number of investors entrust more capital to the asset class.Private Equity Real Estate is a global asset class and in 2007, 46% of capital raised was focused on the US, 26% was focused on Europe and 27% was targeting Asia and the rest of the world.

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