‘Low risk, lower returns and transparency’ order of the day for UK real estate fund investors
UK real estate fund managers are focusing on straightforward, low risk real estate funds as investors seek more transparency and accountability in current market conditions.
More exotic or complex funds are being shunned in favour of ‘stable income returns and diminished risk’, according to Cathryn Vanderspar, a tax partner at leading City law firm Berwin Leighton Paisner.
“UK investors are trying to take opportunities as they come along and the top structuring priority for many fund managers has become speed and simplicity,” Vanderspar said.
“Preference for UK domestic funds, particularly with the sterling / euro exchange rate, is strong at present. Eastern European funds are not currently popular.”
Cathryn Vanderspar also said investors are looking to be more hands-on, getting involved in investor committees and the decisions that will shape the fund. “Transparency and control is becoming a higher priority” she added.
She continued: “The way funds are structured will likely also be significantly affected by the common regulatory and supervisory framework for fund managers brought by the European Commission’s Alternative Investment Directive.“Although the directive is in its early stages and will not come into force before the end of 2011, it is already clear it will be one of the big issues for property fund management in the future”.
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