Private Equity Real Estate -An empirical study of investors and funds in the Nordics

Abstract: This paper describes a limited sample of non-listed real estate funds operating in the Nordic countries. Non-listed closed-ended funds are typically associated with a lack of transparency, limited size and tradability and complicated structures. More and more non-listed closed-ended funds have been launched in Europe and the Nordics for the past ten years. The purpose of this study is to describe and examine the potential benefits with investing in non-listed funds in relation to other real estate investments. By conducting interviews with fund managers and investors alike, this paper reviews the recent developments of funds, discusses typical fund structures and presents how investors and fund managers consider non-listed funds as opposed to other real estate investments. Our findings suggest that non-listed funds are not suffering from low transparency. Moreover, there are indeed liquidity issues but they are not considered to be of particular concern. The findings also suggest that there has been a homogenization of distribution policies and administration fees. The answer to the specific research question is that institutional investors invest in non-listed funds in order to achieve greater diversification effects as the investment is seen as a complement.