Investment Strategies of Real Estate Funds : A Study on Investment Strategies of Directly Owned Real Estate Funds with Operations in Sweden for an Upcoming Economic Downturn

Abstract: The property market has experienced rising property values over a long period, resulting in lower yield requirements. In the spring of 2022, a war in Ukraine began that would unbalance the global financial system, resulting in high inflation and rising interest rates that significantly impacted the property market, the transaction volume fell, and prices began to fall. As a result, we wanted to understand better how directly owned real estate funds operating in Sweden are acting in their investment strategies in the face of a coming economic downturn. The report mainly used qualitative data collection, where 16 semi-structured interviews were conducted over five weeks. The results were collected and summarised together with the theory and literature review. The conclusion clarified that directly owned real estate funds operating in Sweden do not change their investment strategies significantly in the face of an upcoming economic downturn. The same applies to their investment parameters. The majority had raised capital before the shift in the market and thus committed to investing the capital according to the strategy set at that time. In contrast, real estate funds consider property segments that follow macroeconomic trends with a defensive nature as most desirable in the face of a coming economic downturn.