CAIA - 17 - Listed vs. Unlisted Real Estate Flashcards
___-___ real estate funds are funds with an indefinite life that do not limit the number of shares they offer investors.
Open-end real estate funds are funds with an indefinite life that do not limit the number of shares they offer investors.
In the ___, open-end funds typically redeem on a first come, first serve basis. In ___, investors do not typically have to wait.
In the U.S., open-end funds typically redeem on a first come, first serve basis. In Europe, investors do not typically have to wait.
In the UK, the primary unlisted open-end investment vehicle is a ___ ___ ___ .
In the UK, the primary unlisted open-end investment vehicle is a property unit trust.
Property unit trust prices are based on ___ ___.
Property unit trust prices are based on appraised values.
In the UK ___ ___are unregulated property unit trusts open only to institutional investors that are exempt from capital gains tax or corporation tax.
In the UK unauthorized PUTs are unregulated property unit trusts open only to institutional investors that are exempt from capital gains tax or corporation tax.
___ ___ are designed to provide UK retail investors exposure to RE properties.
Authorized PUTs are designed to provide UK retail investors exposure to RE properties.
Authorized puts (are/are not) exempt from capital gains tax
Authorized puts are exempt from capital gains tax
There are three types of property unit trusts (PUTs) for UK RE exposure:
- ___ PUTs
- ___ PUTs
- ___ PUTs
There are three types of property unit trusts (PUTs) for UK RE exposure:
- Unauthorized PUTs
- Authorized PUTs
- Offshore PUTs
___ ___ ___ ___ are investment vehicles that can invest in RE directly or indirectly (primarily via UK REITs)
Property authorized investment funds are investment vehicles that can invest in RE directly or indirectly (primarily via UK REITs)
___-___real estate funds are funds with a finite life that issue a fixed number of shares before making any RE investments.
Closed-end real estate funds are funds with a finite life that issue a fixed number of shares before making any RE investments.
Most closed-end RE funds are established as ___ ___, a key advantage of which is their ___-___status.
Most closed-end RE funds are established as limited partnerships, a key advantage of which is their tax-neutral status.
Real estate fund of funds are typically ___-end in the U.S. and U.K and ___-end in the rest of Europe.
Real estate fund of funds are typically open-end in the U.S. and U.K and closed-end in the rest of Europe.
The advantage of a fund of funds is that it provides ___.
The advantage of a fund of funds is that it provides diversification.
The disadvantage of a fund of funds is that it has ___ ___.
The disadvantage of a fund of funds is that it has extra fees.
There are four advantages of unlisted RE funds:
- ___ of ___
- ___ ___ provides potentially higher returns and less risk
- ___ ___ for certain regions or subsectors
- ___-___income.
There are four advantages of unlisted RE funds:
- Diversification of risk
- Skilled managers provides potentially higher returns and less risk
- Targeted investments for certain regions or subsectors
- Tax-exempt income.
There are 3 main disadvantages of fund of funds:
- ___ ___ can reduce returns
- ___can be significant
- ___and ___-___effect
There are 3 main disadvantages of fund of funds:
- Cash drag can reduce returns
- Fees can be significant
- Leverage and J-curve effect
___ ___are vertically integrated firms involved in land acquisition, development, ownership, operation and tenant services.
Large REITs are vertically integrated firms involved in land acquisition, development, ownership, operation and tenant services.
___ are professionally managed, and have the tax advantage of not paying corporate income tax on taxable profits provided they distribute a large portion of their income to shareholders in the form of dividends.
REITs are professionally managed, and have the tax advantage of not paying corporate income tax on taxable profits provided they distribute a large portion of their income to shareholders in the form of dividends.