In the early 2000s, the world seemed to be behaving pretty much as it should, or at least the way many institutional investors wanted it to. The risk-reward mantra worked well, in that risk (at least occasionally) was rewarded. Investors could see (and bet on) big trends continuing, such as the bull market in bonds, which was in full swing and building a momentum that would carry it into this decade. Diversification worked, too—different asset classes behaved, well, differently, which let investors take on risk in certain places while hedging their bets elsewhere.
In today’s macro environment fraught with confusing cross-currents, real estate has continued to show investors its flexibility and mettle. In particular, mezzanine debt, global real estate investment trusts (REITs) and build-to-core strategies hold great potential.
The 2008 economic crisis re-shaped the global financial landscape. Investors who were negatively impacted as a result of having assets tied up in illiquid investments are understandably concerned about a repeat scenario.