The best GPs pursue repeatable success
Real estate investment ﬁrms that thrive through multiple market cycles seldom adhere to the “trust your gut” approach to investing. A winner at one end of the cycle may make a losing bet at the other end, losing LP conﬁdence in the process.
According to RSM’s Nate Ruey, real estate investors must take a systematic approach to assessing risks at the macro and enterprise level. For example, an investor focused only on cap rates and deal-level uncertainties around interest rates as well as geographic risk might ultimately fail by overlooking weaknesses in the finance function, information technology and cybersecurity at the firm level.
“It’s important to have checks and balances not only with back-office operations, but also through the management of the underlying assets and properties,” he says.
In this video segment, experts from StepStone Group, The Praedium Group, and RSM discuss how the most successful firms trust a repeatable process that involves a painstaking assessment of all forms of risk.
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In this video segment, RSM discusses how an institutional-quality back-office demonstrates a broad commitment to risk management.