Investment managers in the real estate market: Reading into the role


The Covid-19 pandemic drove accelerated disruption in virtually every industry of the global economy, and real estate is no different. What has traditionally been a slower-moving industry now sits at the epicentre of profound transformations in how people live, work, shop and invest.

Today, India is considered one of the favoured markets of most global brands. They are peeking into the Indian market with aggressive growth strategies. Real estate is fast emerging as a favoured asset class that will likely be central next year. These spaces generate more profitable returns for HNI investors. 

Indian real estate investors would continue to grow their investment portfolios. If they can’t handle it independently, they may need to engage a third party to help them manage their investment.

Real Estate Investment Management

Real estate Investment management is the process of maximising a property’s value and returns on investment. It includes locating the highest and most consistent sources of revenue, reducing expenditures and risk management, among other things.

Real estate Investment managers usually deal with strategic and vital issues related to a property. They comprehend real estate as an investment class. Real estate Investment managers provide strategic thought and execution to enhance the value and cash flow of the assets.

AIFs are emerging as an essential asset class for Investment Managers

Alternative Investment Funds are a class of pooled-in investment instruments that raise capital from organisations and high-net-worth individuals, including Indian, foreign or non-resident Indians, with a minimum ticket size of Rs.1 crore. As the name indicates, they provide an alternative to traditional investments like direct equity, mutual funds, and bonds.

The investment of privately pooled funds in AIFs is always per a defined investment policy in alternative asset classes like VCs, private equity, hedge funds, and infrastructure funds. The investee domain comprises pre-revenue stage companies, early and late-stage ventures, and growth companies that desire to scale their future operations. It would ensure they provide long-term and low-risk investment opportunities to a diversified set of investors at all stages of their evolution.

Investment Managers have a critical role

The role of an investment manager concerns financial planning, undertaking research, investing, day-to-day buying and selling of securities, portfolio monitoring and more. They would first analyse the investor’s current financial status and set reasonable financial goals. Then, based on these goals, they devise strategies and conduct trades within portfolios to bring the best returns for the investor while minimising the associated risk.

They would assist in answering any questions and concerns, offer valuable investment guidance and help the investor make challenging financial decisions. In simple words, investment managers support wealth augmentation through strategic investments.

Investment managers are increasingly aligning toward newer asset classes

Real estate is an innovative investment opportunity, provided the investor has a mid to long-term horizon. Investors have a visible appetite for portfolio diversification beyond traditional equity and debt classes and improved returns. That optimism is propelling the investments in the AIF space and has turned them into an alternative investment asset class. Both large and small investors in India again realise the benefits of investing in real estate. The prospect of expanding the risk-return mix across various asset classes has driven alternative investment funds (AIFs) as a viable recommendation for family offices and high-net-worth investors (HNIs).



Views expressed above are the author’s own.


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