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Property Funds: Smart Money Turning Dumb?

Interest Rates are rising, property values are falling and real estate investment vehicles are in trouble. All of them, well apparently not.

Looking at net money flow data for public and institutional open-end real estate funds in Germany the latter just had a record year with net new money exceeding €15bn p.a. for the first time in history. And 2021 was already a record year.

At the same time, public fund net money flows are down for the third year in a row, a development you would expect in the current environment. Effectively new money has more than halved since its peak in 2019.
Do we have an explanation for why smart (institutional) money seemingly acts dumb at present? No, we don’t but we will keep you posted once we find out.