Turning down a five year lock in a private fund for listed REIT liquidity, and using that liquidity twice
Consider an allocation offer into a private open-ended real estate fund: 100k minimum, quarterly redemption with gate language allowing suspension, marks published quarterly by the manager's appraiser. A reasonable product, but not the only option. Putting 85k into listed REITs instead, at a meaningful discount to underlying asset value per the research shops tracking it, is a common alternative. 13 months later on a case like this: 2,900 in dividends, price return 5.1 percent, and the liquidity gets used twice. Once to raise 12k in two days for an unpredictable family cash need that would otherwise require a credit line. Once to move 9k out of the broad index into healthcare after it fell harder than the rest of the sleeve for reasons worth debating. The part that tests conviction is usually month three, when the sleeve is down about 9 percent while the private fund posts a smooth quarterly gain. It can look like a mistake. The private mark is an appraisal on a lag while the listed price is live, so the comparison is never apples to apples in either direction. The habit worth keeping: deciding upfront that liquidity is part of what is being paid for, and that using it is allowed. Without that framing, every sale starts to feel like a failure of conviction rather than a planned use of the position.
