What is a REIT?
REIT companies (REAL ESTATE INVESTMENT TRUST) were created in the 1960s in the United States as a solution that facilitates exposure to the profitable real estate market in a liquid way, which enables excellent returns with a low correlation to the general stock market.
By law, REIT companies must distribute 90% of their profits as dividends to investors. Thus, the companies generate, beyond their increase in value, a passive and fixed quarterly income, which can be relied on as long as there is no significant deterioration in the company’s situation.
REIT companies are large public companies traded on the NYSE, NASDAQ, and usually on the S&P500 – meaning, they are obligated to the transparency of their management procedures and external audits and enable high liquidity for the investor thanks to their vast trading volumes. A REIT company is usually characterized by spreading a high number of yielding real estate assets for each real estate sector fund that characterizes it – such as residential real estate, hospitals, offices, industry, commerce, and more.
The AriAlgo Fund
AriAlgo Global Fund is an Israeli fund founded by Roni Apple, Yuval Ziper, and Prof. Assaf Ze’evi. The Fund is active only in the tradable American real estate market and has developed a unique technology that combines fundamental analysis, artificial intelligence, and machine learning to generate advanced market insights, which enable data-based decisions to be made for investments in yielding real estate stocks.
AriAlgo’s system tracks and monitors all real estate companies on an ongoing basis and produces an index of the best companies in the field at any given moment. This technology gives AriAlgo a significant advantage over all other players in the real estate market and more informed decision-making by the fund managers in choosing the companies to invest in.
The fund is managed by a senior team that brings decades of practical experience in investments, hedging, machine learning, and algorithms. Roni Apple, the co-founder, and CEO of the company, held senior positions in hedge funds and various companies in the United States for many years and is a graduate of Columbia University’s School of Business Administration. Prof. Assaf Ze’evi, also a co-founder of AriAlgo, is an expert in machine learning – the basis of the company’s technology. He has won prestigious awards on behalf of companies such as Google and IBM and is an active partner in the company’s activities.
The layer cake approach:
AriAlgo has a management approach based on several layers of research and decision-making. In the first and most elementary layer of all, there is research implemented on the REIT companies – this is information that most investment entities in the world have and is not unique to the fund. But beyond this layer, the other layers generate signals and insights that help the team make more informed decisions based on more complex data.
In the third layer – machine learning methods are used – this information is difficult to extract by other means and gives AriAlgo a significant advantage over other companies.
All the data collected in the various research layers enter the system that defines the goals of the fund managers – such as the degree of risk, the required return, and more. The system knows how to draw conclusions with investment recommendations that match the vision of the fund managers. In other words, it is a “semi-automatic” system – it is not a fully automatic algorithmic system that only performs daily trading by system decision. Still, the fund has a combination of complex AI systems and the fund manager’s discretion, the definition of goals, and vision.
Advantages of investing in the fund:
- A team with decades of experience in the field of real estate in the United States.
- The power of an advanced algorithmic system for managing risks and extracting relevant intelligence from data.
- Liquidity – the investment in the fund is liquid in two ways: both the assets held by the fund are fluid, and the fund can realize them in a short time, and for the investor in the fund – the funds can be redeemed from the fund once a month (and after nine months from the date of investment).
- A risk management system at the standard of the largest entities in the market.
- Use advanced trading tools such as Call, Short, Put, etc.
- An external supervisor manages financial control – BDO – Ziv Haft. The supervisor is responsible for compliance and regulation, reports to investors, and more, and does not answer to the fund managers.