AREF uses cookies to improve its website.

In order to improve our services, we use cookies to track your browser details. Which in turn aids usability. By continuing to browse our site you are agreeing to the terms and conditions of our cookie policy. Learn more.

Open End Fund Pricing

Attempting to answer a very open-ended question....

What is the best method for pricing open-ended real estate funds?

While this may not have been the subject of every dinner party conversation last weekend, it has been a keen ongoing discussion and debate, within both the investment management community and amongst investors. Accordingly, the Association of Real Estate Funds (AREF) have partnered with INREV, the European Association for Investors in Non-Listed Real Estate Vehicles, to initiate a focus group of real estate investment managers and advisors to fully discuss and analyse the issues involved.

Differing dilution levies, single pricing, dual pricing and different approaches to deal with and/or reflect the various market practices and jurisdictions around the world, while all valid, can nevertheless be confusing from an investor’s point of view. The aim of this joint enterprise is to promote a deeper understanding of these approaches and hence greater investor confidence in such open-ended products.

The initial output from this focus group is the Open End Fund Pricing Study, published alongside this overview. This jointly commissioned paper studies the pros and cons of the different pricing methods and includes financial modelling by Michael Hornsby and Robert White at EY Partners, analysing the effects of each approach. Furthermore, it attempts to test a hybrid of the positives from each method.

This study is offered as a consultation paper across Europe to investors, investment managers and their advisers. It was presented at a breakfast seminar on 30th November in Munich and on the 12th December in the UK (read Event Summary here), both roundtable events, allowing open discussion and feedback gathering for the focus group. 

”For AREF, with a very broad range of fund structures and target investors, the importance of this project is twofold. Partly to demonstrate to investors the validity of different approaches in different circumstances and in different jurisdictions but also to encourage greater transparency and consistency by managers.” John Cartwright, Chief Executive, AREF.

To view the documents outlining the conclusions from Phase 1 of the consultation please click the links below:


Update on Phase 2

Open End Fund Pricing Project
Earlier this year AREF partnered with INREV to initiate a focus group of real estate investment managers and their advisors to fully discuss and analyse the issues involved around the best method for pricing open-ended real estate funds. 
The study was offered as a consultation paper and the Phase 1 results were released in July, links available above.
Following on from Phase 1, the project is now progressing to Phase 2 where we will be taking a closer look at topics such as governance around pricing mechanisms and also secondary markets and pricing.
AREF and INREV will be publishing regular updates on the projects to members over the first half of 2019.  
For further information, please email us: