Manager characteristics and real estate mutual fund returns, risk and fees


Purpose: The purpose of this paper is to analyze the effects of individual manager characteristics on real estate mutual fund (REMF) performance. Human capital theory predicts that factors like education, experience and professional certifications improve skill sets and thus performance. Conversely, capital markets theory suggests that these things may be irrelevant in the management of mutual funds.

Design/methodology/approach: A total of 63 REMFs were sampled over the period 2001-2003 and equations were estimate regressing, alternatively, risk-adjusted return, market risk and management fees on a series of fund variables and manager characteristics including the manager's tenure, whether the fund manager holds a professional certification, whether the manager has specific real estate experience, and whether the fund is team-managed.

Findings: Modest evidence is found that team-managed funds have lower risk-adjusted returns than solo-managed funds. Managers with longer tenure tend to pursue higher market risk levels, and there is no relation between manager characteristics and management fees.

Research limitations/implications: This study considers only one cross-sectional time period. Future research might use longitudinal data.

Practical implications: Despite real estate being a specialized field of finance, there is little if any support for the predictions of human capital theory that experience, education and training result in greater performance among managers of REMFs.

Originality/value: This paper extends prior work in mutual fund management characteristics and fund performance to real estate funds.


Finance and General Business

Document Type





Human capital, Managers, Market economy, Real estate

Publication Date


Journal Title

Managerial Finance