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

Abstract

Purpose

The study examines Asia Pacific (APAC) non-listed non-core real estate funds' capital calls (investor equity drawdowns) sequence for varying vehicle strategies.

Design/methodology/approach

Analysis 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.

Findings

Data 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 implications

Investors should therefore budget accordingly when choosing either of vehicle strategies to invest in.

Originality/value

The 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.

Citation

Jadevicius, A. (2020), "Make a call: assessing capital calls velocity for closed end Asia Pacific non-listed real estate funds", Journal of Property Investment & Finance, Vol. 38 No. 6, pp. 617-625. https://doi.org/10.1108/JPIF-03-2020-0027