What's the Rate of Return to Market for Private Real Estate Equity?

The growth in private equity funds is below its top levels . . . but that means that there is plenty of room for growth, according to a just-posted column on the National Real Estate Investor website.

The article spoke with experts in private real estate equity who say that capital inthe funds is  growing at a faster rate, and "will continue to rise over the next five years."

“We’re growing on an average rate of about 10% per year, which is significantly off the peak levels,” says Mark Grinis, EY’s global real estate fund services leader in New York City, in the NREIOnline.com article.

The article continues: "That indicates that there is once again a solid foundation for private equity real estate funds. EY, in a new report, estimates that 425 funds are in the market on a regular basis with the top 10 funds attracting roughly 50% of all investment capital."

The article says that real estate investment is approaching the market now through direct investment and co-investment rather than focusing on closed-end fund participations.

But it also says global real estate markets are more stable, and a strong stock market has raised the issues of "asset allocation and balancing of investment portfolios."

For more on how the private equity funds are assessing risk since the recovery began, the NREI article can be found HERE with registration.

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