Opportunistic funds return -50% in past 12 months

In the year to the end of June 2009, opportunistic real estate funds returned -50.3% to investors, compared to -34.4% for closed-ended value-added funds, according to the latest NCREIF/Townsend performance figures.

Losses in opportunistic real estate funds continue to mount with the most risky property vehicles reporting returns of -50 percent in the year to the end of June.

According to the latest performance figures from the National Council of Real Estate Investment Fiduciaries (NCREIF) and consultant The Townsend Group, opportunistic funds globally reported returns of -50.3 percent in the four quarters to the end of June.

That compares with -34.4 percent for closed-ended value-added funds and -30.4 percent for all core property funds.

However, as in the past quarter, the figures are an improvement against those seen in the three months to the end of 2008, when opportunistic funds recorded quarterly returns of -26.2 percent.

Returns in the second quarter of 2009 were -11.3 percent for the 197 opportunistic funds surveyed, against -14.5 percent in the first quarter.

Closed-ended value-added funds performed better compared to their open-ended rivals in the three months to the end of June this year, returning -11.7 percent against -13.7 percent for open-ended funds in the same period. Open-ended value-added funds returned -46.4 percent in the year to the end of June 2009.

The second quarter real estate fund indices from NCREIF and Townsend follows 140 managers operating 300 funds, two-thirds of which are opportunistic strategies with another 23 percent closed-ended value-added. Just under 60 percent of the opportunistic funds surveyed for the indices target North America, with around 25 percent focused on Asia and roughly 12 percent targeting Europe.