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The landscape in which real estate private equity funds operate is changing, and this is directly impacting their terms and operating models. The state of the market in the aftermath of the financial crisis, especially given the continued challenges in capital raising, has empowered investors to make greater demands of fund managers.

Increasingly, investors are applying pressure over terms and fees and demanding more frequent and transparent reporting. As a result, the pre-crisis standards for deal terms and fees have altered considerably, and fund managers are feeling pressure from investors to make modifications to fit new industry norms. Our recent survey indicates that this is especially true for new and smallto medium-sized funds. Overall fund periods have shortened by an average of two years since 2007, while average investment periods have scaled back from four to three years.

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