“Based on the experiences with so-called ‘open’ real estate funds in Germany – many of them had be to closed and liquidated over years – we decided to exclude illiquid assets from our investment universe,” he says.
And despite knowledge of property funds of funds – “Two of my former colleagues used to manage such a vehicle” – which could arguably provide the liquidity required, Bichler argues that these types of vehicles still do not address the underlying liquidity challenge.
“The real estate fund of fund may have a daily pricing but nevertheless the underlying asset is illiquid. We have learned our lessons.”
Marcel de Kleer fund analyst at Wealth Management Partners in Amstelveen, says that he has no direct exposure but that “indirectly we do because Reits are part of equity benchmarks.
We haven’t bought an individual Reit fund yet. But I don’t rule out that we will some day.” In terms of vehicles, de Kleer adds that his preference would be for a fof.
“If we would allocate to real estate this would be our choice. To be precise: we would go for an open ended Ucits fund that invests in listed property securities – funds. Listed property securities often trade at a discount to NAV. This discount could be an interesting extra source of return.”
Nicolas Di Maggio, head of Indirect Real Estate Investments at Banque Cantonale Vaudoise says the focus in this area is Swiss indirect property assets – property funds, quoted property shares, property foundations – through dedicated mandates or funds of funds.
The bank is also the asset manager for a property fof. “It can be an adequate solution for investors who want exposure to the asset class through a diversified and active (or passive) investment vehicle and sometimes for a minimum investment.
As we are an institutional asset manager specialised in the Swiss property market we are an asset manager of this type of vehicle.
José Maria Martinez-Sanjuán, head of Manager Research and Selection Santander AM, notes briefly that “at the moment we have both Reits and a pure property strategies. Both are active strategies.”