A changing regulatory landscape and strong performance have increased the popularity of real estate debt funds in recent years.
Opportunity knocking: Regulations like Basel III and Solvency II on traditional lenders are creating opportunities for private debt funds. Investors are filling the void as $1.7 trillion of U.S. commercial real estate debt matures through 2017.
Gaining favor: Interest in real estate debt funds has tripled since the end of 2011, but cooled somewhat in 2013.
Money flowing: Interest in the strategy does not appear to have slowed among some of the largest U.S. public pension funds.
Returns rising: Investors are likely drawn to the risk-adjusted returns of real estate debt. Since 2007, the PrEQin Debt index has outperformed value added and opportunistic indexes.
Sources: Aegon USA Realty Advisors; Preqin; P&IQ
Compiled and designed by Timothy Pollard and Gregg A. Runburg