PT  - JOURNAL ARTICLE
AU  - Thea C. Hahn
AU  - David Geltner
AU  - Nori Gerardo-Lietz
TI  - Real Estate Opportunity Funds
AID  - 10.3905/jpm.2005.593897
DP  - 2005 Sep 30
TA  - The Journal of Portfolio Management
PG  - 143--153
VI  - 31
IP  - 5
4099  - https://pm-research.com/content/31/5/143.short
4100  - https://pm-research.com/content/31/5/143.full
AB  - Real estate opportunity funds are one of the fastest-growing segments of the real estate investment industry, similar in some basic respects to other private equity and alternative investment asset classes that seek high returns by taking on more risk in highly illiquid private investments. Opportunity funds rely heavily on the skill and expertise of the fund managers, prompting a question as to whether subsequent real estate opportunity funds launched by the same manager display persistent performance. Despite strong evidence of persistence, such relative performance appears to be mean-reverting or even reversing over longer periods between fund launches. There is less persistence in returns net of management fees, suggesting that successful managers can effectively charge higher fees on subsequent funds.