Valuing non-listed property funds

Hello my fellow monkeys,

I am interviewing in ca couple of days with a value fund who invests indirectly in non-listed real estate funds (I know these are not REITs, since they are not listed).

My question is how the fund manager would value these non-listed funds? Would you still look at NAV, cap rates, or would look at the individual properties in the funds?

Perhaps the valuation methods are similar to REITs, but I thought I would ask the wise people on this great forum.

6 Comments
 

If you're talking about a fund of funds job, where you're "investing in real estate FUNDS" as you say, you won't be valuing anything whatsoever in that job.

If you're talking about nontraded REITs, then it would be valued the same as any REIT.

So, which is it?

 

Interesting.

It is investing in real estate funds, so yes it is a funds-of-funds gig. Wouldn’t you be interested in the underlying assets in the funds you are investing in?

 

@"prospie" Thank you for your comment, I think I was going down the wrong path there for a moment.

I called a friend who used to work in a fund-of-fund, and he explained the basics of how you value funds. Basically you look at metrics like returns, correlations, max drawdown, style, volatility of returns etc. There is nothing wrong with understanding the underlying assets in the funds, but it is not where the main part of the work will be. Or correct me if I am wrong here?

I believe I ended up answering my own question here, after being put on the right path. I believe I might be more interested in being closer to the risk taking and the assets than what a fund-of-funds job will give me.

Does anyone then have any insights of how valuable the experience from a fund-of-fund, will be in pursing a job in a fund doing direct investments?

 
Klax0nDoes anyone then have any insights of how valuable the experience from a fund-of-fund, will be in pursing a job in a fund doing direct investments?
Others can probably attest to this, and I've never worked for a FoF, but my perception (and you will hear the same if you search this site) is that it's really not a great track to be on if you want to do direct investment later on.
 

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