scholarly journals International Real Estate Review

2015 ◽  
Vol 18 (2) ◽  
pp. 241-276
Author(s):  
James Shilling ◽  
◽  
Charles H. Wurtzebach ◽  
Keyword(s):  
Real Estate ◽  
Risk Taking ◽  
Joint Ventures ◽  
Private Equity ◽  
Joint Venture ◽  
Abnormal Returns ◽  
Value Added ◽  
Investment Fund ◽  
Fund Managers ◽  
Equity Core

We study the relative performance of private equity real estate joint ventures by using new data that connect investment style, ownership structures, and quarterly cash flows for a large sample of sold properties from 1978-2009. The expansion into joint ventures by private equity core, value-added and opportunistic real estate funds since 1990 has been significant. This paper tests three hypotheses. First, do real estate joint ventures experience higher returns? Second, are investment fund managers generally willing to take on riskier projects in forming joint ventures? Third, are joint ventures formed to procure new business and grow assets under management and maximize fund fees? Tests of these hypotheses are performed by using quantile regressions, to determine whether the returns on joint venture projects are more concentrated in the tails of the return distribution ¡V particularly in the left (low end) tail ¡V than are whole assets. We reject the hypothesis that real estate joint ventures experience abnormal returns overall. However, we do find evidence that there is a lot more risk taking by value-added funds relative to core funds. Our evidence is also consistent with more risk taking by large investment fund managers vs. small investment fund managers.

European private equity real estate compliance under the AIFMD

2018 ◽  
Vol 36 (2) ◽  
pp. 210-216
Author(s):  
Maiia Sleptcova ◽  
Heidi Falkenbach ◽  
Wisa Majamaa
Keyword(s):  
Risk Management ◽  
Real Estate ◽  
Private Equity ◽  
Regulatory Change ◽  
Investment Fund ◽  
Structured Interviews ◽  
Content Type ◽  
Fund Managers ◽  
Reporting Requirements ◽  
Risk Management Process

Purpose The purpose of this paper is to investigate the effect of Alternative Investment Fund Managers Directive (AIFMD) on European private equity real estate (PERE) industry. Design/methodology/approach The paper draws upon a set of 12 semi-structured interviews with European PERE fund managers to explore their views on the reporting and risk management under the AIFMD, the costs and benefits associated with the AIFMD compliance and the effect of the AIFMD on European PERE industry. Findings A “one size fits all” approach adopted by the AIFMD results in difficulties in understanding and implementing the AIFMD requirements by PERE managers. Due to the limited applicability of the AIFMD risk reporting requirements to PERE funds, PERE managers have developed their own risk metrics, which they report internally. The formalization of risk management process and the separation of risk management function constitute the two most significant changes experienced by PERE managers. The managers recognize a positive branding effect from the authorization and improved risk awareness in their organizations due to the AIFMD. Research limitations/implications The current paper focuses on PERE fund managers and does not address other real estate funds falling under the AIFMD. Practical implications PERE fund managers require feedback and guidance from authorities and best practice recommendations from industry organizations to enable proper compliance. Industry-specific reporting requirements would benefit both the industry players and authorities. Originality/value Given the broad scope of the AIFMD, it is of interest to look at how PERE fund managers have adapted to the regulatory change.

Intermediation in Private Equity: The Role of Placement Agents

2019 ◽  
Vol 55 (4) ◽  
pp. 1095-1116
Author(s):  
Matthew D. Cain ◽  
Stephen B. McKeon ◽  
Steven Davidoff Solomon
Keyword(s):  
Real Estate ◽  
Information Asymmetry ◽  
Private Equity ◽  
Abnormal Returns ◽  
Theoretical Predictions ◽  
Illiquid Investments ◽  
First Time ◽  
High Information

Intermediation in private equity involves illiquid investments, professional investors, and high information asymmetry. We use this unique setting to empirically evaluate theoretical predictions regarding intermediation. Using placement agents has become nearly ubiquitous, but agents are associated with significantly lower abnormal returns in venture and real estate funds, consistent with investor capture and influence peddling. However, returns are higher for buyout funds employing a top-tier agent and for first-time real estate and venture funds employing an agent, and are less volatile for agent-affiliated funds, consistent with a certification role. Our results suggest heterogeneous motives for intermediation in the private equity industry.

The Law of Private Investment Funds

2018 ◽  
Author(s):  
Spangler Timothy
Keyword(s):  
Hedge Funds ◽  
Financial Services ◽  
Private Equity ◽  
Global Financial Crisis ◽  
Private Investment ◽  
Investment Fund ◽  
Investment Funds ◽  
Fund Managers ◽  
The Global Financial Crisis ◽  
The Impact

This book provides a clear and concise dual US/UK and pan-asset analysis on the legal and regulatory issues that arise in connection with private investment funds. The book advises on the structuring, formation, and operation of a range of asset classes, including hedge funds, private equity funds, real estate funds, and other non-retail collective investment vehicles. This edition has been revised to reflect the numerous and significant developments in financial services regulation on both sides of the Atlantic since the publication of the second edition. More elements of the Dodd Frank financial regulatory reforms, which increased the scope and reach of regulation applicable to private funds, have been implemented and commented on in this edition. In relation to European regulation, the impact of the commencement of the Alternative Investment Fund Managers Directive (AIFMD) has also now been analysed. The US/UK approach is maintained, but this edition now also includes consideration of third countries, particularly the Middle East and Asia. An entirely new chapter is dedicated to litigation and regulatory enforcement, and some treatment is given to the effects of the global financial crisis, in particular the regulatory response and the changes to negotiating leverage of fund managers and fund investors. The potential impact of ‘Brexit’ on the United Kingdom private funds industry and the future of the AIMFD and European private funds is also examined.

Public–private equity joint ventures and risk transfers in motorways of the sea

2019 ◽  
Vol 9 (5) ◽  
pp. 669-682
Author(s):  
Carmen Juan ◽  
Fernando Olmos
Keyword(s):  
Real Options ◽  
Joint Ventures ◽  
Private Equity ◽  
Joint Venture ◽  
Mobility Model ◽  
Sustainable Mobility ◽  
Modal Shift ◽  
Policy Makers ◽  
Usual Practice ◽  
Content Type

Purpose The purpose of this paper is to present a new scheme of public–private partnership (PPP) within the framework of motorways of the sea (MoS) similar to that of an equity joint venture along with a methodology for valuing risk transfers arising from options embedded in the clauses included in such agreement. Design/methodology/approach The architecture of the proposed PPP is an adaptation to the scope of a MoS of collaborative schemes commonly used in industry such as equity joint ventures. The methodology for valuing options involved making use of a valuation tree of optimal cashflows along with algorithm designs from the field of financial and real options. Findings The proposed structure of public–private equity joint venture (PPEJV) increases the stability of private–public collaboration as compared with standard PPPs, so as to achieve the desired modal shift. The analyzed case study shows how the methodology provides valuable numerical information for both negotiating partners and policy makers. Practical implications This study provides a quantitative tool for policy makers to redefine the role that public agents and public funds should play in a future sustainable mobility model. Originality/value The originality of the authors’ contribution to the field of PPPs in transport is triple. First, there is no precedent in the literature on PPPs of an architecture similar to that of the proposed PPEJV. Second, unlike the usual practice in the valuation of financial or real options, no prior structure is assumed for modelling the behaviour of cashflows. Third, the type of options addressed is not usual neither in the real options literature in general nor in the valuation of guarantee mechanisms included in PPPs in particular.

Mieterhöhungsmaschinen

2018 ◽  
Vol 48 (191) ◽  
Author(s):  
Knut Unger
Keyword(s):  
Real Estate ◽  
Private Equity ◽  
Global Financial Crisis ◽  
Public Offerings ◽  
The Public ◽  
Fund Managers ◽  
Equity Funds ◽  
Private Equity Funds ◽  
The Global Financial Crisis ◽  
Automated Processes

The article describes the development of large listed landlords in Germany (like Vonovia SE) as a specific form of the financialization of housing. Since the end of the 1990s, large stocks of the fordistic and state-socialist housing infrastructures in Germany were sold to Private Equity Funds. After the German recovery from the global financial crisis the fund managers organized the exists through public offerings. Since then a heavy concentration process has taken place that reaches transnational dimensions. The author proposes to call this process “financialized industrialization of corporate housing business”. Integrated into global financial markets and using IT, the public listed real estate companies subjugate trade, facilitation, management, renting and production of housing to standardized financial calculations and automated processes. However, the “real subsumption” of tenants to real estate capital also gives rise to social protests and reclaims.

Performance vs prospectus = transparency in German closed-ended real estate funds?

2018 ◽  
Vol 36 (2) ◽  
pp. 158-170 ◽  
Author(s):  
Michael Nadler
Keyword(s):  
Real Estate ◽  
Private Equity ◽  
Global Financial Crisis ◽  
Variance Analysis ◽  
German Market ◽  
Content Type ◽  
Fund Managers ◽  
Ex Post ◽  
Ex Ante ◽  
The Impact

Purpose The purpose of this paper is to close the transparency gap by comparing ex ante and ex post performance disclosure, thus providing important conclusions regarding the transparency of this important German market segment. Design/methodology/approach Closed-ended real estate funds (CEREFs) are one of the biggest segments of unlisted private equity funds in Germany. CEREFs have a central “profitability promise” that is based on ex ante forecasts given in the prospectus. Typically, equity is tied to these investments for up to 20-30 years, leaving investors highly insecure whether their expectations will be fulfilled and fund managers actually achieve prospected performances ex post. Findings The performance variance analysis of all German CEREFs outstanding during the global financial crisis reveals that prospect-performance disclosures as well as prospect-performance variances cause substantial problems in Germany due to overestimation biases of many fund managers. Research limitations/implications As typical for the recent scholarly debate, also the past disclosure practice in Germany prohibits a long-term performance analysis, unless researchers apply instruments of modern investment analysis like comprehensive financial plans (“Visualisation of Financial Implications)”. Practical implications The transparency developments in CEREF-reporting of the last decade deliver precise recommendations regarding the internal and external performance variance analysis, risk-profiles and stress tests for the future fund management. Social implications The introduced methodology would increase transparency in the segment of CEREF and, thus, improve investor protection. Since private households in Germany mainly acquire these funds, this is a contribution to sustainability in private asset management. Originality/value The paper develops a new methodological framework for performance measurement of unlisted funds. It then assesses for the first time the impact of transparency and trust on fund performances by applying a performance variance analysis.

scholarly journals Impact of Fund Managers Changes on Polish Equity Funds Performance

2017 ◽  
Vol 17 (1) ◽  
pp. 97-108 ◽  
Author(s):  
Roman Asyngier ◽  
Tomasz Miziołek
Keyword(s):  
Abnormal Returns ◽  
Research Problem ◽  
Relative Strength ◽  
Investment Fund ◽  
Investment Funds ◽  
Equity Investment ◽  
Fund Managers ◽  
Equity Funds ◽  
Before And After ◽  
Portfolio Managers

AbstractPurpose - the aim of the article was an analysis of the returns of universal Polish equity investment funds before and after the change of portfolio managers. The article deals with the following research problem: how the replacement of investment fund managers impacts the results of Polish equity funds. Methodology - the research methodology which used the indexes of relative strength allows determining the abnormal returns of funds in relation to the WIG Index before and after the change of managers. Findings - the analyses showed negative abnormal returns before changing managers and ambiguous tendencies after the change of managers. Originality - this kind of study has not been conducted for the Polish capital market so far.

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