Property

SWFs ditching LP model for property investment

As sovereign wealth funds seek to do more co- and direct investment, real estate is experiencing the most abrupt move away from the traditional limited partner model.

Sovereign wealth funds’ flows into real estate particularly via pooled vehicles have sharply dropped since 2015, underscoring a radical shift in investment strategy for the asset class, new research indicates.

At the same time, the state funds have ramped up direct solo investments in property, making the asset class the biggest recipient of flows of this type in the past few years, according to The Rise of Collaborative Investing Sovereign Wealth Funds’ New Strategies in Private Markets, from Milan’s Bocconi University and the Boston Consulting Group.

Right after the 2008 financial crisis, property funds were capturing more than 50% of investment value and about 40% of deals,...

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