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Special Report: Real Estate & Infrastructure

Powering Hedge Funds

Stockholm (HedgeNordic) – In this publication, you will find that, to little surprise, those managers in asset classes adjacent to real estate, have been particularly vehement about the increasing mispricing of real estate. Not only has the illiquidity premium been drawn down, but the risk of the asset class itself may be misunderstood, given how long the current positive trend has been going on for. Let us not forget that the Nordics are still experiencing a strong urbanization phenomenon, and that it is supporting the demand for residential, but also commercial constructions.

Infrastructure seems to be an obvious alternative: it is stable and less affected by consumer behavior. Unfortunately, infrastructure is not so readily available. Small and shorter-term projects are already expensive, and larger projects are difficult to handle for most investors. Also, countries like Sweden have had a culture of state or municipality ownership for assets that the society depends upon. They have started divesting these projects but it will take time until there is enough availability. Having very large pockets is a must to find good deals in this area, as well as a very long time-horizon.

We went out of our way to find some other alternatives you may be curious about. If you are looking for liquid real estate you can dump when trouble hits, perhaps REITs are an option. Or do you fancy yourself a forest owner? Maybe more extravagantly: what about owning a ship and putting that picture on the wall? Whatever the asset you choose, do not forget that ownership comes with responsibilities. While it may be easier to fulfill those in some areas than in others, good owners with a strong moral compass are needed even more where being ethical is not an obvious choice. Just like prices, sustainability is becoming hotter in most of the real assets space. If you have a moment to spare, we hope that you will chose to read this report, then pause and reflect. No one knows when the music will stop playing, but you can always decide where you would rather be dancing, and mostly, what your next groovy move will be.

Hope you enjoy this edition of HedgeNordic ́s special report on Real Estate and Infrastructure, which you can access here!

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Kamran Ghalitschi
Kamran Ghalitschi
Kamran has been working in the financial industry since 1994 and has specialized on client relations and marketing. Having worked with retail clients in asset management and brokerage the first ten years of his career for major European banks, he joined a CTA / Managed Futures fund with 1,5 Billion USD under management where he was responsible for sales, client relations and operations in the BeNeLux and Nordic countries. Kamran joined a multi-family office managing their own fund of hedgefunds with 400 million USD AuM in 2009. Kamran has worked and lived in Vienna, Frankfurt, Amsterdam and Stockholm. Born in 1974, Kamran today again lives in Vienna, Austria.

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