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11 Must Reads for Real Estate Investors (Dec. 6, 2023)

The CEOs of Yieldstreet and Cadre talked to Fortune about how the acquisition came together. Private debt and equity options geared for accredited investors continue to proliferate. These are among the must reads from the real estate investment world.

  1. The CEOs of Yieldstreet and Cadre detail how the acquisition came together and their combined growth plans “They’d had previous discussions about combining forces, but the time seemed to be right, so they connected earlier this year to make it happen. For Weisz, and Yieldstreet, it was an obvious decision because there’s an alignment between both companies’ mission and vision—which he said is typically the hardest part when it comes to bringing two teams together.” (Fortune)
  2. As Private Credit Surges, Banks and Alternative Asset Managers Turn Frenemies Rather Than Foes “These alternatives firms have increasingly stepped into lending voids left by risk-averse banks. They have also created new vehicles to issue and put money to work in investment-grade credit — such as loan origination firms and business development companies (BDCs) — that traditional lenders cannot match.” (Institutional Investor)
  3. Alternatives ‘more essential than optional’ for 2024: JP Morgan Asset Management “JPMorgan Asset Management has forecast that core infrastructure returns will improve in 2024, increasing to 6.8 percent on an annual basis from 6.3 percent in 2023." (Infrastructure Investor)
  4. Why wealthy investors put $125 billion into this new type of private-equity fund last year “Registered funds that take investments from individuals and smaller institutions rose by about $125 billion in 2022 from the previous year to total assets under management (AUM) of $425 billion, according to data from private-equity investor and data provider Hamilton Lane Inc. (HLNE).” (Morningstar)
  5. Hedge Fund Industry Maturing, Adapting as Investors Rebalance “These multi-manager platforms have replicated trends in other parts of the asset management industry by bringing high-performing investment teams in-house, creating a one-stop shop for institutional investors who want to write big tickets to fewer managers. These platforms can also contend with growing regulatory costs and complexity, giving them a leg up on single-manager shops and new managers, both of which face increasing headwinds.” (Chief Investment Officer)
  6. UBS advises wealthy clients to boost alternative assets allocation to 22% “They recommend a balanced portfolio comprising 30% private markets, with equal allocations in bonds and stocks at 30% and 40%, respectively. This strategy is informed by the potential for higher returns in private assets, which have traditionally outpaced benchmarks like the S&P 500, thanks to what's known as the illiquidity premium.” (Investing.com)
  7. Major Title Company Hamstrung By Weeklong Cyberattack “The company filed a report with the Securities and Exchange Commission last week notifying the government entity of a Nov. 19 cyberattack, writing that Fidelity National Financial blocked access to certain systems as a result, which led to business disruptions. This included its services related to title insurance, escrow, mortgage transactions and other technology serving the real estate and mortgage industries.” (Bisnow)
  8. What Is the Future of the 60/40 Portfolio? “Breaking from the long-time investment defaults of stocks, bonds and cash, alternatives can offer an illiquidity premium, especially for long-term investors, but they are also an opaque asset class, which comes with more performance reporting issues and long-term investment lockup periods than traditional public equities or bonds. With public pension funds increasing their exposure to alternatives, these transparency issues have sometimes become an issue.” (Chief Investment Officer)
  9. Ares Banks $3.3 Billion to Buy Real-Estate Fund Assets “With its fresh capital, Ares said it aims to pursue real-estate deals in which a fund manager offers all investors in a particular pool the chance to cash out their holdings to incoming secondary buyers or remain invested in the vehicle. The firm also intends to acquire secondhand fund stakes directly from investors.” (The Wall Street Journal)
  10. MetLife Downplays Concern Over Commercial Real Estate “The company is seeing employers ‘start to revert back to some level of in-office,’ giving a boost to the outlook, Chief Financial Officer John McCallion said Tuesday at an investment conference sponsored by Goldman Sachs Group Inc. ‘Overall, we think quality will win out in every class in real estate.’” (Bloomberg)
  11. KSL Capital’s Acquisition of Hersha Hospitality Backs New $736 Million CMBS Deal “With KSL Capital Partners' $1.4 billion acquisition of hotel owner Hersha Hospital Trust now closed, the lenders on the deal are rolling the debt into a new commercial mortgage-backed securities offering. Wells Fargo Bank and the commercial bank Citi Real Estate Funding have prepared a $736 million bond offering backed by 19 of 25 hotels in the deal, accounting for 3,102 rooms. (CoStar)
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