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The Fund is actively managed and offers direct exposure to the real estate sector, with significant deviation expected in terms of composition and performance compared to the benchmark. The Fund’s objective is to maximize total investment return through capital appreciation in the real estate sector.
The Fund invests in direct real estate and private equity assets and is intended solely for professional investors. Prospective investors should be aware of the following key risks:
For a full description of all risks, please refer to the Offering Memorandum and the Key Information Document (KID).
In Q3 2025, the European real estate market entered a phase of cautious recovery, underpinned by signs of macroeconomic stabilization and a shift in investor sentiment as the European Central Bank signaled a potential pause in monetary tightening. While interest rates remained elevated, their predictability helped restore a degree of confidence, especially among institutional investors seeking long-term value.
Investment activity, although still below pre-2022 levels, began to rebound selectively, led by strong performance in logistics and build-to-rent residential assets, where demand fundamentals continue to outpace supply. Office markets remained bifurcated, with Grade A, energy-efficient, centrally located properties in high demand, while older, less sustainable stock continued to face downward pressure on rents and valuations.
Retail markets showed pockets of resilience, particularly in Southern Europe, supported by robust tourism and local consumption. Germany, France, and the Nordics experienced more muted transaction volumes as pricing adjustments remained ongoing. Meanwhile, Southern European markets—especially Spain and Portugal—outperformed, driven by investor appetite for hospitality, residential, and mixed-use developments. Overall, Q3 2025 was characterized by selective re-entry, recalibrated pricing expectations, and a renewed focus on ESG compliance and operational resilience across asset classes.
The Cyprus real-estate market is showing resilience and moderate growth, rather than rapid gyrations. Residential property prices are increasing at a restrained pace — for example, property price growth in Q1 2025 was about +2% year-on-year, well below the EU and euro-zone averages. Transaction volume is stronger — sales are rising: sales transactions for the first seven months of 2025 rose roughly 15% compared with the same period in 2024. By district, coastal markets such as Limassol and Paphos remain popular with foreign buyers; inland or capital-city markets (e.g., Nicosia) show slower growth.
Rental demand remains healthy, especially in tourism/holiday-adjacent and short-term segments, thanks to sustained visitor flows and lifestyle migration. On the supply side, there is increasing new development activity and green/energy-efficient product differentiation is emerging. Key risks and constraints include affordability for local buyers (due to elevated price levels and higher cost of living), and the need to monitor interest/rate/mortgage cost dynamics.
Overall, the market can be characterised as stable with modest upside, making it attractive for investment and diversification — particularly for well-located assets — but without the frenzy seen in some other European markets.
The BF Diversified Real Assets Fund continues to pursue a strategic allocation heavily weighted toward direct real estate investments, grounded in our long-term conviction that property assets provide attractive risk-adjusted returns and a reliable hedge against inflation. While real estate remains the fund’s core asset class, we are actively rebalancing our geographical exposure in response to evolving market dynamics. Specifically, we are gradually reducing our holdings in the Republic of Cyprus, where emerging signs of market stabilization and reduced yield spreads are making it increasingly difficult to achieve outsized returns. In contrast, we are intensifying our focus on Spain—particularly in suburban areas surrounding Madrid and Barcelona—where a combination of strong tenant demand, limited new supply, and favorable yield profiles offers a more compelling risk-return proposition.
Complementing our core real estate strategy, we are also introducing selective diversification through a modest allocation to Direct Private Equity. This tranche, which will remain under 10% of the overall portfolio, targets early-stage technology ventures with scalable business models and high growth potential. This approach allows us to cautiously tap into innovation-driven upside while preserving the overall stability of the portfolio.
Our asset allocation strategy remains active and responsive, guided by rigorous research and risk management. By adjusting exposures in line with macroeconomic indicators and sectoral fundamentals, we aim to capture value across cycles while maintaining a focus on capital preservation and consistent income generation. This disciplined, data-driven methodology positions the fund to deliver solid returns with reduced volatility, even amid shifting global market conditions.
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Sub- Fund launch date: 04/06/2018 |
ISIN: CYF000002883 |
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Price: 0.67 NAV per Unit |
CySEC Fund License Number: AIF42/2014 |
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Fund size: EUR 4.3 M |
CySEC Sub-Fund License Number: AIF42_1 |
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SRRI: 6 out of 7 |
Settlement date: Subscription Date + 15 Days |
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Ongoing charge: 1.99% |
CFI Code: CIOGRU |
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Dealing frequency: Monthly |
FISN: IC Realty A1/UT EUR |
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Minimum initial investment: 125,000 EUR |
UCITS V compliant: No |
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Investment Horizon: This Sub-Fund may not be suitable for investors who plan to withdraw their contribution within 5 years |
AIF compliant: Yes |
The Ongoing Charge figure may vary from year to year and excludes portfolio transaction costs. For further details, please see the fund’s Key Information Document (KID).
The fund’s annual report for each financial year will include details on the exact charges made. Please refer to the fund’s costs and charges illustration, which contains information on the costs and charges applicable to your chosen fund and share class.