European opportunity real estate private equity funds have seen a recent surge in interest from institutional investors who have been forced to re-examine their asset allocation because of the global equity markets' downturn. Similar in structure to traditional buy-out funds, real estate private equity funds use leverage to target higher-yielding private investments, returning 15% plus and with an average life span of seven to 10 years.

Antoine Flamarion, managing partner at Nexstar Capital, the only fund focusing exclusively on the French real estate market, believes property assets have become an established component of the alternative asset sector in Europe. "In the past few years French institutional investors have realised that private equity is an effective way to access decorrelated returns. In the same way we anticipate that there will be inflows into the dynamic real estate sector. Investors have begun to see opportunistic real estate funds as an attractive investment class," Flamarion says.