NEPC’s Dulari Pancholi was quoted in a recent FundFire article highlighting an upward trend in hedge funds moving into the real estate space over the past decade.
Big hedge funds that have planted a flag in the real estate asset class appear to be thriving in their adopted markets with new vintages and fundraising efforts – an example of diversification that more of their peer managers might emulate as a way to tap potential growth.
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Extending into real estate can be beneficial to hedge funds, said Dulari Pancholi, a partner leading the credit and multi-asset teams at NEPC.
“Over the past few years, hedge funds have gone through their own struggles,” she said. “If they’re able to build a differentiated business that is a longer-dated product, it locks in a revenue stream that is different and not reliant on just the hedge fund model [where] assets can ebb and flow. So, that brings a little stability to the firm.”
There has been an “upward trend” of hedge funds developing real estate arms over the last decade, especially targeting credit and distress-driven strategies, Pancholi added.
Read the full article on FundFire’s website here.