The denominator effect may lead to LPs missing a 'colossal' buying opportunity created by widespread market distress, according to one of the most influential figures in private equity real estate.
Joanne Douvas, co-founder of US firm Clerestory Capital Partners, said those institutions encumbered with a denominator problem where there is an unintended increase in the investment allocation to real estate created by the relatively further fall in values of assets such as equities and bonds, could find themselves sidelined in the market.
