Real estate funds (closed-end real estate investment funds and closed-end rental investment funds) belong to the category of alternative investments, and are vehicles for undertaking collective investments in the real estate market – which has historically shown a low correlation with the stock market and an attractive combination of profitability and risk. Adding real estate funds to the investment portfolio can promote diversification and may decrease overall portfolio risk, as well as potentially offering the following advantages:

Current income and long-term increase in value:
Shareholders of real estate funds can receive income as both investment income and long-term growth in share value.

High dividend yield:
Rental real estate funds typically pay the majority of current income as dividends (investment income). On average, the dividend yield on rental real estate funds exceeds that on stock and is a stable source of income for investors, without dependence on market conditions.

Low barriers to entry
Investors can invest in even some of the most innovative projects in the real estate market, with only a relatively limited stake. Transaction costs are also insignificant in comparison with direct investments in real estate.

Liquidity
Real estate funds have greater liquidity than direct investments in real estate; investors can buy and sell shares in real estate funds in secondary markets; and the circulation of shares on exchanges is possible.

Absence of leverage
Real estate funds are not permitted to use borrowed funds to purchase real estate (except funds for qualified investors).

Information disclosure:
Shares in real estate funds are the most transparent way to invest in real estate; management companies are obliged to regularly disclose information about the activity of the real estate funds they manage.

Regulation and supervision:
The activities of management companies and transactions to be performed by real estate funds are monitored by a specialised depositary and the Federal Financial Markets Service.

Professional management:
Managers of real estate funds and their partners work in the real estate market and with the real estate assets in their portfolios every day, and are dedicated to their industry.