R
eal estate fund managers are seeking alternative ways to raise capital due to challenging market conditions, aiming to continue acquiring assets. To achieve this, they're employing strategies such as over-the-counter funds, leverage, and installment-based payments. Fund managers believe 2025 will be unfavorable for stock market offerings due to high interest rates and the gap between net asset value and traded prices.

    To mitigate these risks, firms are developing "Cetip funds," which lack liquidity and are not subject to mark-to-market valuation. Investors can sell shares through their investment platform's OTC market before maturity. Tivio is considering launching OTC-traded funds with a fixed term of five to ten years, while HSI has focused on asset recycling by selling properties and distributing dividends.

    However, this strategy has reached its limit as investors no longer factor it into pricing. As a result, HSI decided to retain capital within the fund and prioritize asset value. Hedge is also exploring OTC funds, considering launching a debt-focused "paper fund" under this model.

    Another approach to raising capital is integrating listed funds into exchange-traded funds (ETFs) to attract foreign investors. Hedge's HGBS11 fund was recently included in the FTSE EPRA Nareit Global Emerging Markets Index, marking the first time a Brazilian fund achieved this distinction.

    Banco Fator is working on structuring two OTC funds for retail investors but acknowledges that fundraising will be challenging due to investor losses and lack of liquidity. The firm is also betting on real estate development, offering attractive returns above the benchmark Selic rate but geared toward high-net-worth investors.

    Paladin has been acquiring land through swap agreements, avoiding upfront cash outlays, and leveraging funds or using proprietary capital. A third approach involves structuring installment-based payments for asset acquisitions. Fund managers consulted by Valor believe increased industry consolidation is a likely outcome of the current market environment.