“When you invest, you are buying a day that you don’t have to work.” – Aya Laraya, Realtor
Family offices have a primary objective of long term wealth generation and preserving assets for subsequent generations. This is best achieved by investing in asset classes which have a proven track record of delivering long term, consistent, low risk returns on investment.
The paradigm of real estate investments has proven time and again how a well-timed investment into the real-estate asset class can boost wealth creation prospects. In addition to timing the investments, one must identify appropriate segments and opportunities to generate good yields and returns, generate passive income, and compound the wealth generation.
Private equity real estate is an alternative asset class of real-estate investments. It is a combination of two distinct functions.
1.Professionally managed investment funds focused on distinct segments of real estate development and management.
2.Acquisition, rehabilitation, and management of properties through investment funds.
Owing to its dual function and distributed risk, private equity real estate is a natural fit as an investment vehicle for high net worth individuals, institutional investments, and family offices.
With the current economic climate and challenges foreseen because of a rising cost of living, which is fueling a spike in inflation, family offices and HNWIs have their eyes set on portfolio bifurcation and proportioning a larger section of their wealth estate to be invested in asset classes that have a greater chance of yielding optimized returns and a better shot at sustained wealth creation.
Real estate has different sub-asset class segments like owning private residential/commercial properties, investing in holding land parcels for gains, build-to-rent property developments, and many more.
Family offices and asset managers of HNWI investors would be well served by parking their wealth in private equity real estate investments. This would help in leveraging the distinct benefits integral to the real estate market while ensuring consistent, risk adjusted yields to become a source of passive income.
In general, the private equity real estate investments are deployed aligning to one of the four below-mentioned strategies.
Core – A conservative strategy having lower-risk investments and returns targeting high-quality, and high-value properties.
Core Plus– A basket of assets where the level of risk and returns are a few notches higher than the Core strategy.
Value-Added- All about moderate risks with the right timing of investments in redevelopment projects, and assuming debts for taking control of ill-managed real-estate projects or renovation projects.
Opportunistic – An alternative strategy constituting varied risk and high-return investment projects, into comprehensive solutions like affordable housing projects, and build-to-rent infrastructure projects.
Given the nuances of the real estate market and its reactions to the economic climate and other external factors, the ability to judge an opportunity and allocate capital becomes a fundamentally critical ability.
Picking the right investment mix within private equity real estate needs deep seated experience of the real estate market and proven financial asset management capabilities for appropriate capital allocation. This dual experience and exposure are best provided by specialists like 33 Holdings who bring the best of both worlds – real estate value appreciation and financial acumen.
At 33 Holdings – family offices and HNWIs would have access to investment professionals and strategic investment planning to appreciate their wealth with deliberate and planned forays in private equity real estate.
Family office and HNWI asset managers are welcome to have a conversation with the 33 Holdings investment relations team by filling in a form with some details or call 678.824.4508 for an in-person consultation.