Closed-End Real Estate Investment Funds as an Investment Management Instrument

Historically, companies operating in the property sector have mainly raised finance for projects through individual joint ventures. However, as the property sector becomes increasingly institutionalised, so-called ‘platform’ investments are becoming more widespread; these are implemented, amongst other means, through closed-end property funds. The aim of this article is to provide a comprehensive analysis of closed-end property funds as a specific capital management tool, as well as to identify their distinctive characteristics. The practical and academic significance of this work lies in the systematisation of the main advantages of such funds for portfolio diversification. The key findings confirm that a rigidly fixed capital structure enables fund managers to implement long-term development strategies, whilst providing protection against macroeconomic shocks. The value and scientific novelty of the research lie in the development of the author’s model of the life cycle of a closedend property fund, which clearly demonstrates the mechanism for resolving the contradiction between asset isolation and the need for secondary liquidity