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Monstrosity returns? Lol RE returns are garbage compared to corporate PE and VC
Go have that conversation with the guys at Blackstone RE
Better yet, a lean opportunistic fund.
Wouldn't waste my breath explaining it to that guy though. Sounds like he has some compensating to do.
Sure that’s one fund. What about oaktree? One of the most respected names in real estate PE. 18% IRR
Curious - How do Mega PE and VC fund returns compare? My understanding is that VCs aim for ~30% returns, which are based on 9 losing investments and 1 investment hitting a 100x multiple. Not sure about PE funds though...
Not really fair to compare mega PE and VC to real estate due to the relatively small deal size of real estate. A 1bn middle market PE fund targets 30%+ IRR where as even the most opportunistic RE funds are targeting the low 20s
Any REIT guys with real answers?
Generally speaking, REITs have a fee structure whereas a REPE/opportunistic fund would have more of a promote/participatory structure, for obvious reasons. I've stated on other threads but there can be exceptions to the rule. This is generally due to the types of deals that each acquire and also a function of the usual investor profile. The thing I think is laughable is that wannabe hardos in college on this forum start spamming links about REITs outperforming other fund profiles when you can't compare them. REITs/core funds basically buy and hold something forever as long as it's spitting out relatively good annual yields relative to bond rates whereas the structure of value-add/opportunistic funds generally have a lifespan of 5-10 years. So of course depending on the vintage of those funds they could have vastly superior/inferior returns to REITs which are more steady state. Right now for example, people are seeing lots of funds with acquisition vintage in '06-'07 and wondering why the returns are poor. The people that say this have no concept of how the industry (and broader capital market) works.
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