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Lessons learnt: The return of the financial engineering - don't repeat the sins of the last cycle

  Author: Michael Kingcott ( AMP Capital )
 July, 2015
  Price: FREE


The past 6-9 months has seen a significant change in real estate debt markets and, once again, financial engineering on paper looks a tantalising proposition to enhance returns. The purpose of this paper is to highlight the impact of various gearing scenarios on our market forecasts, highlight external risks to the investment environment which could influence the sustainability of gearing, and review recent academic research on the subject. The aim is to provide guidance to the best “risk adjusted” strategy for leverage this cycle and the implications for portfolio construction.

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