Open-End and Closed-End Funds and Real Estate Investment Trusts

Abstract

In addition to the direct acquisition of real estate, there are also various forms of indirect investment. Open-end and closed-end funds as well as the real estate investment trusts (REITs), which are currently passing through the legislative procedure, deserve particular mention and will be dealt with in detail in the following. Indirect participation models are interesting to foreign investors for two different reasons. Firstly, it is possible to invest in companies that already exist. Such investments not only reduce the administration expense, in particular the cost of setting up one's own staff organisation, but also create the appropriate spread of risk from the very outset. From this aspect, investment in open-end or closed-end funds holding several properties or in a stock corporation which is formed as a real estate investment trust may be of interest.