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Alternative Market Briefing

Real estate investing grows in Luxembourg

Thursday, August 16, 2018

Bailey McCann, Opalesque New York:

While investments in real estate have slowed down some in the US, global investors are still interested, according to delegates at the recent Opalesque Luxembourg Roundtable.

"Over the past 12 months in particular, large managers have raised significant amounts of capital in larger real estate platforms which aim to deliver stable returns over a long period of time," says Mike Hornsby of EY, noting that EY's real estate business has grown 38% over the past year. "In addition to core real estate, the product which is attracting a lot of capital at the moment are the classic closed-end value add strategies, moving up the risk-return curve."

According to Hornsby, more work is being done in Luxembourg and the EU to improve how real estate investment vehicles are being designed. The European Association for Investors is taking on a leadership role around product design standards in order to make it easier for investors to understand the opportunity set and expected risk/return profile. That has led to the emergence of new open-ended funds which are getting some interest from investors alongside more traditional core funds and closed-end vehicles.

As new products come to market, investors have been quick to commit capital. "In 2017, we had approximately 25% to 28% growth in debt funds and close to 30% growth in direct real estate," says Sean Murray of fund administration firm SANNE. "We have seen a lot of money going into stu......................

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