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The body urged ESMA to rethink draft guidelines on collective investment undertakings to avoid capturing joint venture agreements. However, it resisted a tighter definition of what might constitute a joint venture. INREV's sticking point comes over the definition of day-to-day control over a fund's assets. The broadly worded definition, were it to include real estate funds, could require a level of activity inappropriate to an illiquid asset class – especially in joint ventures split between financial and management partners.
INREV public affairs director Jeff Rupp said: "It's critical that they understand how it works in real estate – on an infrequent basis. It wouldn't take much – just a slight clause, or even a footnote, to say real estate is different and to clarify that the day-to-day management of portfolio assets would not mean doing something with those assets every day."
The UK Association of Real Estate Funds, in its submission to a domestic consultation launched on the implementation of the AIFMD, welcomed a softening of the controversial depository requirement on the basis that a shortage of UK depositories would leave specialist and smaller managers struggling to find one, "either at a competitive price or at all".
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