Following the weakening of European property markets, investors and managers have come to realise that some of the recent challenges and financial difficulties were also the consequence of poorly-conceived investment strategies, governance and weak alignments of interests between managers and investors. In this article, we will try to explore the situations that created these challenges and explain how the underwriting in non-listed real estate funds has evolved.

The strategy of new investment vehicles, with an increased focus on the agenda of limited partners (LPs), is discussed in more detail. Fund documentation has seen the introduction of additional forms of protection for investors. Finally, the alignment of interests is monitored with greater scrutiny in all its aspects.

After the European property markets peaked in 2007–2008, institutional investors started to witness the deterioration in the performance of several non-listed property vehicles that they had co