Uploaded on Jul 14, 2020
Here is how you can Understand Capital Growth Funds.
Understanding Capital Growth Funds
Understanding Capital Growth Funds
Funds tied to capital such as land - and not the stock market - are more affected
by specific local conditions and benefit from location diversification. A capitals
growth fund is any portfolio of investments that is assembled with the intent to
generate an investment return. Typically, those returns are reinvested.
Of course, achieving capitals growth - to sell at a price that is higher than the
price paid on the investment - is a goal, not a guarantee. But the chances of
success are much enhanced by working with professional capital growth
professionals who truly know the assets that are being invested in. The collection
of investments within the fund and the market conditions that affect them
determine whether a capital growth fund lives up to its name.
Capital growth funds based in real estate are different from, say, those tied to
the stock market. Fund managers look at the distinct and unique combinations of
land tracts to maximise certain factors, including local market conditions that
would increase or decrease the value of each particular piece of property.
Typically, those returns are reinvested. A balanced capital growth fund in real
estate would also be diverse across many geographical jurisdictions such as
counties, as a local political structure can influence how land is used and zoned.
Also, diversification in the likely end use of the land (residential versus
commercial, for example) can help the capital growth funds investor hedge
against disruptions in any particular sector. The expertise of capitals growth
fund managers in land acquisition and land planning is therefore essential for
developing valuable real estate-based capital growth funds. Experienced fund
managers focus on the most profitable part of the land development process:
acquiring sites that have been identified to come forward for residential or
mixed-use development but do not yet have detailed plans or permissions. Lucent
then works with its own in-house team of specialists augmented by a select group
of advisors to produce sustainable "development-ready" land sites before selling
to house builders or other development companies.
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