Exchange-traded fund investing as European open-end diversified core equity real-estate funds' cash substitute

2020 ◽  
Vol 38 (2) ◽  
pp. 156-160
Author(s):  
Arvydas Jadevicius
Keyword(s):  
Real Estate ◽  
Design Methodology ◽  
Private Equity ◽  
Real Estate Market ◽  
Content Type ◽  
Responsible Investment ◽  
Asset Class ◽  
Private And Public ◽  
Exchange Traded Fund ◽  
Practical Implications

PurposeThe study is set to explore a viability for substituting part of cash holdings within European open-end diversified core equity (ODCE) real-estate funds with listed real-estate exchange-traded fund (ETF) alternative. Academically, this research bridges a knowledge gap within private real-estate market research.Design/methodology/approachFirst, the study investigates the correlation between ODCE and ETFs to assess series interdependence. Next, the study generates a blended ODCE and ETF portfolio and examines its performance by quantifying a) the contribution to returns and b) the diversification benefits.FindingsThe findings suggest that a 1 percent spare cash allocation to an ETF increases ODCE fund returns by few bps although the diversification benefits are more nuanced.Practical implicationsReal estate and other investment vehicles are encouraged to review their cash-holding strategies. Real estate, infrastructure or private equity vehicles could designate a small proportion of available cash to asset class-specific ETFs. These cash substitutes are likely to increase returns and could strengthen diversification, although there are some caveats. For ESG-conscious investors, sustainable ETFs and associated passive conduits with strong responsible investment characteristics could provide cash replacement alternatives at the margin.Originality/valueThe study adds additional evidence on the contested issue of blending private and public real estate.

Years purchase revisited: quarterly in advance cash flows

2015 ◽  
Vol 33 (3) ◽  
pp. 291-298
Author(s):  
Michael Patrick
Keyword(s):  
Real Estate ◽  
Design Methodology ◽  
Cash Flows ◽  
Real Estate Market ◽  
Content Type ◽  
Compelling Reason ◽  
Market Practice ◽  
The Uk ◽  
Practical Implications

Purpose – The purpose of this paper is to explain the derivation of the years purchase (YP) quarterly in advance formula. Design/methodology/approach – This education briefing is an overview of the YP quarterly in advance formula in the context of the UK real estate market. Findings – Whilst arithmetically more precise than market practice it lacks a compelling reason to be adopted in its place. Practical implications – Understand the effect on stated yields of using annually in arrears, rather than quarterly in advance, assumptions. Originality/value – This is a review of existing models.

Structuring and financing private equity and venture capital transactions in Luxembourg

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Bertrand Géradin
Keyword(s):  
Venture Capital ◽  
Design Methodology ◽  
Private Equity ◽  
Corporate Law ◽  
Efficient Manner ◽  
Equity Investment ◽  
Content Type ◽  
Key Issues ◽  
Practical Implications ◽  
Optimum Balance

Purpose Luxembourg is the jurisdiction of choice for many private equity and venture capital investors/funds. Though the optimum balance of financing instruments in relation to any structure varies according to its particular circumstances, one factor that all Luxembourg domiciled FDI structures have in common is the requirement for an appropriate level of equity investment. This article intends to summarize some of the topics frequently encountered in relation to equity structuring choices. Design/methodology/approach Author details the different steps and choices available to investors and funds. The article offers answers to questions to provide a broad, yet detailed, overview of the process and journey; from selecting the vehicle right through to distributing to investors, governance, and compliance. Findings To avoid an expensive mistake, it is paramount that the private equity or venture capital investors and management team receive detailed advice to ensure: (i) the deal is structured in the most tax efficient manner possible and the commercial deal is suitable for all parties, and (ii) the deal is structured in a manner which is effective under Luxembourg law, for both tax and legal purposes. Practical implications It is important that non-Luxembourg lawyers are able to identify key issues when negotiating the terms of the investment documents, in particular, the articles of association and shareholders' agreement. Originality/value Practical guidance from Luxembourg lawyer specializing in corporate law, mergers and acquisitions, venture capital and private equity transactions.

Understanding the differences of public and private self-service technology

2014 ◽  
Vol 28 (1) ◽  
pp. 60-70 ◽  
Author(s):  
Joel E. Collier ◽  
Daniel L. Sherrell ◽  
Emin Babakus ◽  
Alisha Blakeney Horky
Keyword(s):  
Structural Equation ◽  
Design Methodology ◽  
Equation Modeling ◽  
Public And Private ◽  
Content Type ◽  
Private And Public ◽  
Self Service ◽  
Self Service Technology ◽  
Individual Self ◽  
Practical Implications

Purpose – The purpose of this paper is to explore the potential differences between types of self-service technology. Specifically, the paper explores how the dynamics of public and private self-service technology influence customers' decision to use the technology. Design/methodology/approach – Existing customers of private and public self-service technology were surveyed from the same industry. Using structural equation modeling, the authors examine how relevant self-service constructs influence evaluations and attitudes of customers across both settings. Findings – The analysis reveals that customers' control and convenience perceptions differ across public and private self-service technology. Additionally, customers placed a heavier emphasis on the hedonic or utilitarian evaluation of a service experience based on the type of self-service technology. Practical implications – For managers of self-service applications, understanding the unique differences of public and private self-service technology can aid in the implementation and adoption of the technology. By properly understanding the differences of the self-service types, managers can provide a beneficial experience to the customer. Originality/value – By identifying and describing two distinct categories of SSTs, this study allows managers and researchers to better understand how and why individuals choose to utilize individual self-service technologies. Through understanding the unique dynamics of a public and a private SST experience, retailers can determine the appropriate strategy for customer adoption based on the utilitarian or hedonic functions of the technology.

The role of investment property appraisal in European real estate companies

2020 ◽  
Vol 13 (1) ◽  
pp. 105-122
Author(s):  
Juha Mäki
Keyword(s):  
European Union ◽  
Real Estate ◽  
Design Methodology ◽  
Annual Reports ◽  
Real Estate Industry ◽  
Publicly Traded ◽  
Content Type ◽  
The Real Estate ◽  
Practical Implications

Purpose This paper aims to examine the connection between appraisals of investment properties and earnings properties in companies from two perspectives: what kinds of companies employ the most reputable appraisers and how appraisers produce estimations. Design/methodology/approach The research uses annual reports of European Union (EU) publicly traded real estate companies and examines the period 2007-2016. Findings The contribution of this study lies in establishing that some indicators and features of real estate companies affect the choice of appraiser and also in illustrating differences in the results of property valuations. In short, smaller companies with weaker performance are less willing to use external valuation, and external appraisers produce more conservative estimations for investment properties. Practical implications The research produces beneficial information for investors and other stakeholders interested in the real estate industry. Originality/value This is the first novel study to examine the link between appraisals of investment properties and earnings properties in companies in detail.

Airport noise compensation: real estate perspective

2019 ◽  
Vol 12 (2) ◽  
pp. 250-266 ◽  
Author(s):  
Jacek Batóg ◽  
Iwona Foryś ◽  
Jan Konowalczuk
Keyword(s):  
Real Estate ◽  
Noise Level ◽  
Linear Models ◽  
Real Estate Market ◽  
Single Family ◽  
Content Type ◽  
Explanatory Variables ◽  
Noise Compensation ◽  
Restricted Use ◽  
Practical Implications

Purpose This study aims to present a problem of noise compensation related to the localization of single-family houses in the restricted use areas (RUA) created around airports. The authors presented different methodological approaches to the valuation of such amends and characterized distinct solutions applied in that area in chosen countries and cities. Design/methodology/approach To estimate the level of those indemnities, linear models including spatial and generalized linear models, were applied. The set of explanatory variables contains quantitative and qualitative attributes of real estates. The influence of outliers indicated by means of cluster analysis on the received results were also considered. Findings The results show that after accounting for noise level and house characteristics, houses in noisier areas were sold for less than houses subjected to less noise. Unit prices of houses located outside the RUA were on average 17.05 per cent higher than the prices observed in zone with noise level for the daytime of 60 dB and 8.95 per cent in zone characterized by noise level for the daytime of 55 dB. Practical implications Received results can be compared with results obtained by other authors, but its most important application is possibility of use the proposed methodology by judicial appraisers to assess the proper level of noise compensation for home owners or tenants. Originality/value An identification of real estate market heterogeneity and its considering in estimation of compensation related to airport noise evidence some novelty of the research.

Building firm capability: managerial incentives for top performance

2016 ◽  
Vol 37 (4) ◽  
pp. 41-46
Author(s):  
Francesco Castellaneta
Keyword(s):  
Competitive Advantage ◽  
Design Methodology ◽  
Private Equity ◽  
Firm Capabilities ◽  
Content Type ◽  
Incentive Programs ◽  
The Core ◽  
Capability Building ◽  
Firm Capability ◽  
Practical Implications

Purpose This paper aims to present a model of how incentives enhance competitive advantage by improving the sourcing, development and leveraging of firm capabilities. Design/methodology/approach The author first reviews the key findings of prominent academic and managerial papers on capability building and incentives. The author then proposes a model that advances our understanding of how incentives affect competitive advantage through capability building. The author applies this model to the empirical setting of private equity, where buyouts – by adopting the “carrot and stick” approach – improve the alignment of managerial and firm interests and, in turn, encourage capability building. Findings The model shows how incentives act on capabilities in three areas: the leveraging of existing capabilities, the sourcing of capabilities internally and the sourcing of capabilities externally. Practical implications The model is useful for focusing executives on how incentives impact the development of firm capabilities, which are at the core of competitive advantage. Originality/value This paper expands on existing literature by providing a model linking incentives to the competitive advantage of the firm. The model will encourage new ways of thinking about incentive programs, casting them as a method for developing firm capabilities and thereby sustaining firms’ competitive advantage.

What goes up and what goes down

2017 ◽  
Vol 33 (8) ◽  
pp. 7-9
Keyword(s):  
Real Estate ◽  
Case Studies ◽  
Design Methodology ◽  
Reading Time ◽  
Cutting Edge ◽  
General Motors ◽  
Content Type ◽  
The Usa ◽  
Pertinent Information ◽  
Practical Implications

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings For many young managers and strategists, few of them will realize just how mighty Japan and its firms were in the 1990s. As the world’s second biggest economy, it saw many of its firms lead their industries in both size and innovation – Toyota and Sony being just two examples – so that they genuinely threatened to overtake the USA and its preeminence. Indeed, when Toyota finally overtook General Motors as the world’s biggest car manufacturer, the effect was felt through Detroit and beyond. Further stories about the similar rise in the price of Tokyo real estate became legendary as well – for example that the well-heeled district of Ginza in central Tokyo was worth more than the whole of California. Practical Implications The paper provides strategic insights and practical thinking that have influenced some of the world’s leading organizations. Originality/value The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

Valuation paradigm: a rationality and (un)certainty spectrum

2017 ◽  
Vol 35 (2) ◽  
pp. 228-239 ◽  
Author(s):  
David Jansen van Vuuren
Keyword(s):  
Real Estate ◽  
Design Methodology ◽  
Confidence Score ◽  
Valuation Theory ◽  
Practical Application ◽  
End User ◽  
Risk And Uncertainty ◽  
Content Type ◽  
Secondary Purpose ◽  
Practical Implications

Purpose The purpose of this paper is threefold: the primary purpose is to suggest a real estate paradigm spectrum to act as reference for the contextualisation of observed market phenomenon in system terms; the secondary purpose is for the spectrum to contextualise the efficacy of real estate and valuation theory, methods and techniques; and the tertiary purpose is to propose a confidence score for reporting uncertainty to the end user of a valuation report. Design/methodology/approach Literature was reviewed on the concepts of risk and uncertainty, rationality and several systems thinking domains. Findings The framework can provide context to observed market phenomenon and distinguishes between agency and mechanism in contributing to conditions of certainty and uncertainty. The argument followed in this paper is that it is necessary to contextualise the efficacy of real estate and valuation theory, methods and models under conditions of certainty, normal uncertainty and abnormal uncertainty. The characteristics of conditions can be used as basis to develop new theory and practical application or modify existing. Practical implications Real estate economic theory can be organised in terms of the spectrum and the framework can potentially identify where further research is required and the requirements it must meet as measured against the characteristics of the framework. Current valuation methods and models can continue to be used when valuing under conditions of certainty, however, modifications to methods and models are required to account for complexity when valuing under conditions of normal uncertainty and abnormal uncertainty. The confidence score included in this paper can also be used to report the conditions of certainty/uncertainty under which the valuation was performed. Originality/value This paper aims to set the basis for new theoretical and practical developments of insights into real estate economic and valuation theory, methods and models while also contributing to the reporting of uncertainty through the proposed confidence score.

scholarly journals Measuring customer satisfaction: a study of the Swedish real estate industry

2016 ◽  
Vol 34 (4) ◽  
pp. 316-331 ◽  
Author(s):  
Peter Palm
Keyword(s):  
Real Estate ◽  
Design Methodology ◽  
Commercial Real Estate ◽  
Signal Quality ◽  
Organisational Development ◽  
Real Estate Industry ◽  
Content Type ◽  
Real Estate Sector ◽  
Customer Evaluations ◽  
Practical Implications

Purpose – The purpose of this paper is to identify the strategies of formal customer evaluations and the use of satisfied customer index in the Swedish commercial real estate industry. Design/methodology/approach – This research is based on an inventory of 24 commercial real estate companies use of formal customer evaluations and an analysis of 15 interviews with top-level managers in the Swedish commercial real estate sector. Findings – Only half of the companies included in the study conduct formal evaluations, although they are considered to work customer oriented. Two different strategies for using formal evaluations is, for improvement work and for signalling quality. One proposed explanation to why only half of the companies conduct formal evaluations is the possibility that the official Swedish Real Estate Barometer is not sufficient if the company would like to use the result for organisational development. There are instead indications that this barometer mainly is used in publicity and marketing purpose, to signal quality. Research limitations/implications – The research in this paper is limited to Swedish commercial real estate sector. But, the overall strategies for conducting formal evaluations should be applicable in general. Practical implications – The insight the paper provides regarding how the industry perceive the Swedish Real Estate Barometer gives direct implications of improvements of the barometer. Originality/value – It provides an insight regarding the use of formal customer evaluations and a proposition of how the Swedish Real Estate Barometer could be changed to better support and fulfil the aim of being a barometer for benchmarking.

Make a call: assessing capital calls velocity for closed end Asia Pacific non-listed real estate funds

2020 ◽  
Vol 38 (6) ◽  
pp. 617-625
Author(s):  
Arvydas Jadevicius
Keyword(s):  
Standard Deviation ◽  
Real Estate ◽  
Design Methodology ◽  
Value Added ◽  
Data Interpretation ◽  
Asia Pacific ◽  
Content Type ◽  
Investment Programme ◽  
Practical Implications

PurposeThe study examines Asia Pacific (APAC) non-listed non-core real estate funds' capital calls (investor equity drawdowns) sequence for varying vehicle strategies.Design/methodology/approachAnalysis 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.FindingsData 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 implicationsInvestors should therefore budget accordingly when choosing either of vehicle strategies to invest in.Originality/valueThe 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.

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