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BeginnerBrazilian REITs · Lesson B2.3 · Module B2

Manager: who decides what to buy

Module B2: Who runs the fund

11 slides~5 minquiz at the end

In this lesson

  • Bylaws and manager: the field and the play
  • The decisions that move results the most
  • Why the purchase price becomes income
See the slides
Chess pieces on the board

FIIs · Lesson B2.3

The rules are the board. The manager makes the moves.

Why two funds with the same strategy earn different amounts.

Aaaatu · Wikimedia Commons · CC BY-SA 4.0

Field and play

The bylaws set limits, the manager chooses

Bylaws

the field

  • What the fund may buy
  • How much freedom the manager has

Manager

the play

  • Which asset, at what price
  • When to sell or renegotiate

CVM Resolution 175, Annex III, art. 11, II, “b”: the investment policy sets the manager's degree of freedom.

What matters most

Six decisions that move results

  • Buywhich property or CRI, and at what price
  • Selland when
  • Borrowhow much debt the fund takes on
  • Issue shareswhen to raise new money
  • Distributehow much to pay above the minimum
  • Renegotiatewith tenants or borrowers

By the numbers

Same warehouse, two managers

R$ 100 mn×9%cap rate · manager A=R$ 9 mnrent a year
R$ 100 mn×7%cap rate · manager B=R$ 7 mnrent a year
R$ 2 mn÷R$ 9 mn=22%less income at B

Cap rate = yearly rent ÷ price paid. Overpaying locks in lower income until someone sells.

Its duty

The perk belongs to the fund, not the manager

The rule requires

  • Seeking the best terms
  • Loyalty to the fund

Not allowed

  • Keeping a discount or benefit earned for being the fund's manager

CVM Resolution 175, general part, art. 106 and sole paragraph.

At Rico aos Poucos

Management is one of a fund's four risks

  • Fund riskis it fragile?
  • Losing moneyat this price, could I lose?
  • Income getting worsewill payouts fall?
  • Managementdoes whoever's driving play for unitholders?

In the 10/09/2026 test, management best anticipated the worst drop of the next 12 months. Small sample: 7 funds.

The common mistake

“A property fund runs on autopilot”

Every purchase, sale, share issue and renegotiation is a management call — and it stays in the results for years.

Keep this

Three takeaways

  1. Field and playThe bylaws say what's allowed; the manager chooses what to do.
  2. Purchase price is incomeOverpaying for the same property leaves the fund with less income for years.
  3. LoyaltyAny advantage the manager gets from the role belongs to the fund.

Quick quiz · 1 of 2

Where does it say what the manager may do without asking unitholders?

See answer

In the bylaws. The investment policy sets the manager's degree of freedom. The report only tells you what it already did.

Quick quiz · 2 of 2

A R$ 50 mn warehouse at an 8% cap rate. How much rent a year?

See answer

R$ 50 mn × 8% = R$ 4 million a year. At 6%, it would be only R$ 3 million.

Lesson complete

Next lesson

B2.4Beginner · Lesson B2.4The meeting: where unitholders decide tooYour share votes — and the calls that matter most go through the meeting.Continue
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Educational content, written for learners. Not investment advice.