PERE CREDIT: Operating partnerships set to rise as managers seek to increase alpha

Real estate private credit and equity managers are anticipating an increase in the number of firms investing via operating platforms as a way of generating increased alpha and making more nuanced investment decisions.

As fund managers investing via operating platforms are expected to become more common in the coming year, there is also the expectation that AI – in addition to traditional real estate investing – will help these groups to improve and accelerate their processing and analysis of information, noted Chris Shelton, managing director at RealInsight, a commercial real estate debt focused fintech platform.

“Utilizing a system that digests unstructured data around financial statements or rent rolls that parses, extracts, and interprets critical information allows us to operate faster and more efficiently, ” Shelton said.

There is still a human in the loop as part of the process, but the concept of bringing unstructured data into the system should be solved with AI, Shelton added.

“Whether you’re researching a part of a city, considering an acquisition, or looking at comps, it can be very difficult to wrap it all, ” Shelton added. “It’s revolutionizing research and analysis that would otherwise be a cumbersome process. It is not a silver bullet, and it won’t predict the future, but it can help you wrap it all together.”

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