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Large real estate funds in the times of COVID-19

COVID-19 is a global issue which will have long-lasting consequences. A real estate fund is an investment instrument which allows investors to combine their financial resources and invest them into real estate. The financial resources can be provided by way of private or public investment, or via a stock exchange.

Risks of COVID-19.

Real estate funds suffered much from the problem with temporal liquidity, especially the open-end funds. This caused a reduction in payouts to investors and restructuring initiated by investors. Below we shall list certain actions that could help preserve the value:

  • Suspend withdrawals from funds;
  • Allocate programs for asset purchases;
  • Direct investing into the funds;
  • Asset administration within the limits of the market rates.

In case of such correct approach one can hope for the preservation of the current state of the capital markets. Yet, should these conditions not be met, which as of now is the case, given that no positive tendencies are to be detected, a market meltdown is quite possible. The only thing left is to monitor the current situation and try to predict the COVID-19 impact on the capital markets in 2020 and in the upcoming years.