The European Association for Investors in Non-listed Real Estate Vehicles (INREV), the Investment Property Forum (IPF) and the Society of Property Researchers (SPR) – co-sponsors of the Nick Tyrell Research Prize – have announced the 2021 winning research paper, awarding the prize to joint authors Franz Fuerst, Nick Mansley and Zilong Wang of the Department of Land Economy, University of Cambridge.
Entitled ‘Do Specialist Funds Outperform? Evidence from European Non-listed Funds’, the paper explores the extent to which specialisation can lead to outperformance for European non-listed real estate funds.
Based on an analysis of the performance of 592 funds over nearly two decades between 2001 and 2019, the research concludes that both country specialisation and a combination of a country and sector specialisation are indeed associated with superior performance, but that sector
specialisation alone is not.
The empirical evidence points to the fact that specialists exhibit higher total returns both on a raw unadjusted basis and also when accounting for differences in fund and market characteristics. The results indicate the importance of being able to access local knowledge and expertise and that implied information advantages and local investment managers’ market knowledge and networks may be difficult to replicate.
Andrew Smith, Chair of the Judging Panel commented: 'This year’s prize attracted some strong submissions on a very diverse range of topics. The winning paper was selected on the basis of both its practical relevance to the industry and the quality of the underlying research, in the best traditions of the Nick Tyrrell Research Prize. Although there is extensive research in the area of fund selection, the authors break new ground by taking account of leverage and other important structural differences between funds that have not necessarily been captured by previous studies. The judges were impressed by a well-written and robustly supported paper, with clear, straightforward and actionable conclusions.'
