Which type of fund tends to involve acquiring property from distressed sellers?

Opportunistic funds are characterized by their investment strategy that targets properties under distress or those in situations requiring significant turnaround efforts. These funds often seek to take advantage of market inefficiencies by acquiring assets at a discount, typically from sellers who may be financially pressured and eager to liquidate their holdings quickly.

Investors in opportunistic funds are willing to assume higher levels of risk in exchange for the potential for substantial returns. These funds frequently invest in properties that may need substantial renovations, repositioning, or operational changes. As a result, they have a higher expected return compared to more conservative investment strategies, but also come with increased risk.

In contrast, core funds typically invest in stable, income-producing properties with minimal risk, while value add funds focus on properties that require some degree of improvement but do not seek the more aggressive strategies tied to distressed assets. Core plus funds are similar to core funds but include some elements of value enhancement, implying a more moderate strategy compared to opportunistic investments.