Make a call: assessing capital calls velocity for closed end Asia Pacific non-listed real estate funds
Journal of Property Investment & Finance
ISSN: 1463-578X
Article publication date: 14 May 2020
Issue publication date: 30 October 2020
Abstract
Purpose
The study examines Asia Pacific (APAC) non-listed non-core real estate funds' capital calls (investor equity drawdowns) sequence for varying vehicle strategies.
Design/methodology/approach
Analysis starts with a cursory data interpretation that extracts a typical investors' equity drawdowns schedule. Thousands of simulations are then computed for each vehicle strategy for each year to further interpretation.
Findings
Data and methodological limitations notwithstanding, overall estimates suggest that funds exhibit a contrasting capital calls sequence. As a group, APAC non-core non-listed real estate funds call circa 76.3% of investors' committed capital during the first four years of the fund life. Single sector, single country and value added vehicles have a greater capital calls velocity compared to their multi sector, multi country and opportunity peers. However, the two fund groups exhibit a notable standard deviation heterogeneity of drawdowns.
Practical implications
Investors should therefore budget accordingly when choosing either of vehicle strategies to invest in.
Originality/value
The study adds additional evidence on the topic of capital calls velocity. Results should assist LPs with their non-listed APAC real estate funds investment programme further.
Keywords
Acknowledgements
The author would like to thank anonymous reviewer, Robert Lie, Amelie Delaunay and ANREV Research Committee for their editorial that greatly improved this manuscript. Disclaimer: This manuscript was prepared by the author in his personal capacity. All views and opinions expressed in this manuscript are those of the author and should not be regarded as representing the views or opinions of institution he represents.
Citation
Jadevicius, A. (2020), "Make a call: assessing capital calls velocity for closed end Asia Pacific non-listed real estate funds", Journal of Property Investment & Finance, Vol. 38 No. 6, pp. 617-625. https://doi.org/10.1108/JPIF-03-2020-0027
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited