Exchange funds are required to hold 20% of their assets in qualifying illiquid assets. Real estate is a standard choice across the market given its income and appreciation characteristics. However, we manage this allocation very differently from other exchange fund providers.

Our funds invest in real estate through partnerships with established, top-tier, external real estate managers. Each firm we partner with has a strong track record of real estate investments, and is considered to be among the top managers in the industry. These investments are funded using credit facility relationships we’ve established with multiple banking partners.

The real estate component typically includes investments in various sectors such as multi-family residential, industrial buildings, life sciences, retail malls and office buildings. We employ a thorough diligence process to ensure that the overall ownership is highly diversified across sub-sectors, geographies and real estate managers.

In addition to helping meet the legal requirements for tax deferral, the real estate investment serves a secondary objective of providing stable income through rental yields and potential capital appreciation from property value increases.

See more detail on what happens to the real estate assets upon redemption.

For a more thorough view of the overall investment strategy, review the primary investment objectives of our funds or a get a high level look at exchange funds.
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