Before we close out 2012, we wanted to share some thoughts on what has been an encouraging year in terms of institutional capital flows. We have been pleased to see institutions on a global basis slowly returning to allocating capital into real estate (yes, including investing in funds), but things are far from the old normal. Characteristic of the new normal, though, is the unprecedented scope of due diligence conducted by investors and consultants. Although the diligence process is more time-consuming for managers and in the words of one manager “just brutal”, the result is no doubt a more informed decision by the investor. That said, we continue to scratch our heads as perennial under-performing managers continue to make it through diligence and raise capital in this environment.
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