A still-fledgling secondary market for private real estate funds is getting a big push forward from institutional investors eager to invest in newly hot areas of real estate and sell off other, less desirable parts of the sector.
“Secondaries are really coming into their own. Covid just accelerated the increase,” said Eric Adler, president and CEO of PGIM Real Estate. “Some investors want to stay in real estate, but others want out. Secondaries are becoming a good solution.”
In private markets, secondaries trading allows investors to buy and sell fund stakes at any point in that fund’s life, rather than stay in a vehicle designed to be held for a decade or more.
One CIO of a state pension fund said the push behind the real estate secondary market falls under the heading of “never waste a good crisis.”
“The real estate market is changing quickly, but funds, by definition,…