As the moderator of the “future of REIFs” panel at the recent Private Equity and Real Estate conference organised by the Association of the Luxembourg Fund Industry, he shared the view that the number of REIFs in the country will continue to grow as institutional and private wealth investors seek higher returns with some stability.
“Luxembourg’s advantages have led to it emerging as a jurisdiction of choice for corporations, institutional and private individuals willing to accelerate and adequately structure their business, within and far beyond EU borders,” said Jervis.
The inflow of cash into real estate funds was said to be coming from three principal institutional investment sources: pension funds, insurance companies and sovereign wealth funds.
He explained that the core underlying drivers of this trend include a long-term shift in the allocation policies of institutional investors as their approach to liquidity and desire to diversify investment risk has developed; a historically low interest rate environment that is encouraging investors to seek improved yields from real estate; and short-term currency weaknesses in some markets that has encouraged currency exposure diversification through the asset class.
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