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Paper eres2005_312:
Opportunistic Investment in Germany An Agency Theory Based Analysis

id eres2005_312
authors Schulte, Karl-Werner and Nico B. Rottke
year 2005
title Opportunistic Investment in Germany An Agency Theory Based Analysis
source Book of Abstracts: 2005 European Real Estate Society conference in association with the International Real Estate Society
summary The role of opportunity funds in the German real estate investment market has increased considerably in recent years. To keep abreast of this development, the following paper proposes an investment model for opportunity funds. The model analyses opportunity funds as intermediaries between capital that is looking for investment and the investment possibility itself. The model should create incentive compatibility beneath original investors (insurance companies, pension funds etc), opportunity funds and possible operating partners who are specialists of local markets by integration of agency theoretical aspects. A double delegation relationship can be observed: First, the opportunity fund acts as agent in relation to the original investor or principal. Second, the opportunity fund as investor is the principal and the operating partner is the agent who has a distinct advantage of information. The different types of asymmetric information which come into play in these relationships are depicted afterwards. It is described how they affect the relation of the transaction partners, and consequently which threats result from an investment with real estate private equity in Germany. These threats are then countered with solution approaches which are incorporated as management and financial elements into an investment model, in order to maintain incentive compatibility beneath the transaction partners.
series ERES:conference
type normal paper
discussion No discussions. Post discussion ...
ratings
session Session D1
last changed 2008/11/01 09:47
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