Great Fund Insights: Navigating NAV Issues In Open-Ended Real Estate Funds During Economic Challenges

The spate of recent economic challenges have brought intense volatility both to financial markets and the real economy and heralded a sharp return of the difficulties that confronted asset managers during the Global Financial Crisis of 2008–2010.

This publication focuses on the key issue currently facing managers of open-ended real estate funds offered to institutional investors: the difficulty of striking reliable valuations of properties under the economically complex conditions of:

• generalized market volatility and damage to businesses, particularly in the retail, leisure and hospitality sectors;
• seizure—or severe slowdown—in property transactions
• independent valuers providing managers with fair value valuations subject to material uncertainty caveats.