How private real estate funds invest.

Opportunistic funds target the highest returns in private real estate: ground-up development, distressed acquisitions, major repositioning and complex situations. They use the most leverage and take the most risk, aiming for equity-like returns.

Value-add real estate funds buy assets with a fixable problem (under-management, vacancy, deferred capex or an expiring lease) and create value through repositioning before selling. Returns sit between core and opportunistic, with moderate leverage and a defined business plan per asset.

Core-plus funds own mostly stabilised assets but accept a little more risk (some leasing, light repositioning or higher leverage) for a modest step up in return over pure core.

Core funds own stabilised, well-let, high-quality assets in prime locations. They use low leverage and target steady, income-led returns, the most conservative end of the private real-estate risk spectrum.

Real estate debt funds lend against property rather than owning the equity: senior loans, mezzanine and preferred positions. Returns come from interest income and fees, with the borrower's equity absorbing first losses.

Diversified real-estate strategies span multiple risk profiles and property types in a single vehicle, or pursue niche approaches that don't map to a single classic bucket.