Markets in Financial Instruments Directives (MiFID II) will bring about fundamental changes to distribution of wealth and asset management products and services in the EU. Relationships will change, and the winners will be those who adapt their strategies and have the operational capability to respond effectively to the new environment.
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Do you really know how your Private Equity or Real Estate entities are impacted by FATCA?
The Luxembourg Financial Connection - Issue 21
Good Real Estate Group (International) Limited 2013
Real Estate, Hospitality & Construction
Building your business future
Today’s real estate industry must adopt new approaches to address regulatory requirements and financial risks, whilst meeting the challenges of the current economic environment and achieving sustainable growth.
Luxembourg has emerged as the leading domicile in Europe for vehicles investing directly in internationally diversified real estate portfolios. Key factors behind Luxembourg’s success include the flexible legal and fiscal environment, the ability to structure cross-border investment strategies and investors’ desire to diversify their portfolios.
Our real estate practice has the ability to mobilize a team of seasoned professionals to address complex and demanding challenges and provide seamless service on a global basis. We can help move you forward. Are you ready to break ground?
In working with you, we draw on our industry knowledge and insight to help you strategically position yourself – wherever you are in the world. Let us help you better understand some of the key challenges facing the industry, including:
- Regulatory and technical accounting changes
Major regulatory and technical accounting changes are occurring in the US, Europe and other geographies, which has created a challenging environment for real estate, hospitality and construction organizations. These include the Dodd-Frank Act, the Alternative Investment Fund Managers Directive (AIFMD) and proposed accounting changes for leases and revenue recognition from the Financial Accounting Standards Board and International Accounting Standards Board.
We are committed to helping our clients understand how to approach these changes. We advise funds on SEC examinations and help them assess, design and implement compliance programs. Effectively navigating the sophisticated marketing regime required by the AIFMD will be a key challenge and could lead to a competitive advantage for alternative investment groups. Considering the potential implications of leasing and revenue recognition early on is important, because what organizations do today in preparation can have a significant effect on their business tomorrow.
- Real estate private equity
The recession, financial crisis and downsizing in the credit market have all impacted real estate private equity funds over the past several years. Given the ongoing challenging environment, it is more important than ever to understand the trends affecting the sector so you can respond effectively.
Key trends include:
- Distressed deal opportunities will continue and convergence of the bid-ask spread will foster greater deal volumes.
- Due to regulatory and financial reporting changes, the fund operating models will change over the medium to long term.
- Overall, fund terms have significantly evolved since the financial crisis, and many real estate fund managers have had to make concessions to attract investors and win back their confidence.
- Investors are now more focused on scrutinizing the real estate fund platforms where they are placing capital. More information will be needed to meet investors’ reporting requirements.
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Unlocking hidden value in real estate with REITs
EY leaders share their insights with Real Estate Forum on preparing companies for the REIT route for non-core real estate.