Antti’s guest was UB’s portfolio manager Jaakko Onali. 
The decisions of several housing and real estate funds to suspend redemptions of fund units have generated a lot of discussion in the market early this year. What has led to this situation? UB’s portfolio manager Jaakko Onali explains the situation of real estate funds and the market.
Topics:
00:00 Introduction
00:40 “Liquidity is really weak”
04:40 Problems are concentrated in Finland
05:37 Housing market
06:45 Why don’t unit holders get their money?
09:46 Are open-ended real estate funds truly “liquid”?
11:53 Who defines the interests of unit holders?
12:35 Could redemptions be financed with debt?
14:39 What kind of cash allocations are typical for real estate funds?
16:03 Why aren’t properties forced to be sold, and what would be the consequences?
19:27 Real estate valuation and the principal-agent problem (conflict of interest)
22:30 How to monitor and evaluate the real estate market and funds?
24:03 Situation of the UB Nordic Commercial Properties fund
26:08 Market situation in the Nordics by country
28:30 Why has the cooling of the construction market not supported the existing property stock?
30:35 Long-term interest rates, inflation, and real interest rate
32:40 Expectations for 2025