Another Minefield for Private Equity
Investment Dealers' Digest
By Kelly Holman
... If there is a winnowing in the numbers of private-equity real estate investors because of the commercial real estate downturn, it likely will be felt among smaller firms, according to Stanley Ross, the chairman of the board for the USC Lusk Center for Real Estateat the University of Southern California. "Some of the smaller- and medium-size firms with heavy concentrations in real estate will take some hits and some of their investors might retreat," he says.
Ross, who helped organize the Resolution Trust Corp., co-authored a paper on real estate private-equity funds with Wharton real estate professor Peter Linneman in 2002. He thinks that while writeoffs and losses will impact short-term returns in the funds, private-equity property funds should recover over the long term...