A vehicle that invests in a portfolio of other funds rather than directly in assets, giving investors diversification and access at the cost of an extra fee layer.
Related terms
- Fund vintage
The year a fund makes its first investment, used to benchmark its performance against other funds that began deploying in the same market conditions.
- General partner (GP)
The sponsor entity that manages a fund or deal, makes investment decisions, and bears unlimited liability; typically commits a small slice of capital alongside…
- GP catch-up
A waterfall tier after the preferred return where the sponsor receives most or all distributions until its share of total profit reaches the agreed promote per…
- Gross yield
Annual rental income as a percentage of price, before deducting operating costs.
- Ground-up development
Building a project from a bare or cleared site rather than acquiring an existing asset; the highest-risk, highest-return real estate strategy, carrying constru…
- Hold period
The length of time an investor plans to own an asset before selling.
- Hurdle rate
The minimum rate of return an investment must clear before it is deemed worthwhile; in a fund, the return limited partners must receive before the sponsor earn…
- Income return
The portion of total return generated by net rental income relative to the capital invested, excluding any change in the asset's value.