As is the case with investment funds in general, real estate funds are trending toward greater levels of specialization. Specialization may be by asset class, strategy or both. Examples of asset class-specific firms include: office, retail, medical, industrial, agricultural, storage, hospitality, etc. Real estate fund strategies can be loosely categorized into one or more of the following groups:
There are two standards of investor suitability that may apply to investment fund investors, depending whether the fund manager is required to be registered as an investment adviser: the “accredited investor” standard or the significantly higher “qualified client” standard.
Hedge fund manager fees typically consist of (i) an annual management fee and (ii) a performance allocation, also referred to as incentive allocation, or carried interest. The latter is not technically a “fee,” but rather a capital allocation, as will be discussed. This blog post describes the role of both compensation components.