%0 Journal Article %A Urbi Garay %A Enrique ter Horst %T Real Estate and Private Equity: A Review of the Diversification Benefits and Some Recent Developments %D 2009 %R 10.3905/JAI.2009.11.4.090 %J The Journal of Alternative Investments %P 90-101 %V 11 %N 4 %X This article discusses the recent literature on the benefits of including real estate and private equity investments in an investor's portfolio, and examines certain topics that have attracted academic and practitioners' interests in these two areas. In the case of real estate, several recent developments, including the introduction of new real estate products (e.g., derivatives, mutual funds, closed-end funds, exchange-traded funds, and hedge funds dedicated to real estate), have helped to enhance the transparency and liquidity of investments in this asset class, while at the same time real estate markets throughout the developed world entered a severe bear market (2007–2008). In the case of private equity investments, there have been several recent developments, such as the introduction of new investable products and the development of statistical models for private equity returns. Performance measurement issues in the area of private equity investments remains a sparsely explored topic, with several unanswered questions such as the exact nature of the probability distributions of private equity returns and how they change through time. TOPICS: Real estate, private equity, portfolio construction, performance measurement %U https://jai.pm-research.com/content/iijaltinv/11/4/90.full.pdf