The Growing Importance of Secondary Market Activities for Open-end Real Estate Fund Shares in Germany

Philipp Gerlach () and Raimond Maurer ()
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Philipp Gerlach: Goethe University
Raimond Maurer: Goethe University

Schmalenbach Business Review, 2020, vol. 72, issue 1, No 3, 65-106

Abstract: Abstract Shares of open-end real estate funds are typically traded directly between the investor and the fund management company. However, we provide empirical evidence for the growth of secondary market activities, i.e., the trading of shares on stock exchanges. We find high trading levels in situations where the fund management company suspends the issue or redemption of shares. Shares trade at a discount when the fund management company suspends the redemption, whereas shares trade at a premium when the fund management company suspends the issue. We also find evidence that secondary market trading activity is increasing since German regulation introduced a minimum holding period and a mandatory notice period for open-end real estate funds.

Keywords: Open-end real estate funds; Secondary market; Trading restrictions; NAV-price-spread (search for similar items in EconPapers)
JEL-codes: G11 G28 G29 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s41464-019-00081-y

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