Capital Allocators Podcast: Asymmetry and Opportunity in Public Real Estate at Long Pond
John Khoury joins Ted Seides on his Capital Allocators podcast to discuss the evolution of public real estate investing, Long Pond’s investment process, and the launch of Long Pond Real Estate Select ETF, LPRE.
Episode Description:
John Khoury is the Founder and Managing Partner of Long Pond Capital, a hedge fund that specializes in publicly traded real estate securities. After 15 years in the business, Long Pond is one of the few remaining firms in the niche. Long Pond recently launched an active ETF, ticker: LPRE, which invests in the most attractively priced stocks from Long Pond’s list of the highest-quality real estate businesses.
Our conversation covers John’s path into public real estate investing, changes in the investable universe, and the impact of passive flows and pod shops on the sector. We turn to Long Pond’s investment process, focused on identifying and exploiting asymmetry, and cover John’s perspectives on the major real estate sub-sectors. We close with a discussion of Long Pond’s new actively managed ETF.
Discover the Strategy: Learn how LPRE selects high-quality, undervalued real estate stocks using Long Pond’s asymmetric approach. Explore LPRE ETF >>
Source: Capital Allocators
For a complete list of LPRE holdings, please click here. Holdings are subject to change.
Definitions
“REIT (Real Estate Investment Trust)”: a company that owns, operates, or finances income-producing real estate and is required to distribute most of its taxable income to shareholders.
“Capital Two market participants”: participants in the public equity capital markets—primarily institutional investors (mutual funds, hedge funds, pension funds, ETFs) and other large-scale capital allocators.
“Pod model”: a hedge-fund organizational structure in which multiple small, independent teams (“pods”) manage their own portfolios within a larger platform, each team with specified risk limits and performance accountability.
“Long-only model”: an investment strategy that buys (goes long) securities without shorting; returns rely solely on asset appreciation and income.
“Basis points (bps)”: a unit equal to 1/100th of a percent (0.01%).
“Prologis”: Prologis, Inc., the world’s largest industrial REIT, focused on logistics real estate such as warehouses and distribution centers.
“IRR Paradigm (Internal Rate of Return Paradigm)”: a framework where investments are evaluated based on their projected annualized rate of return over time, incorporating cash flows, timing, and terminal value.
“GFC (Global Financial Crisis)”: the worldwide financial and economic crisis of 2007–2009.
“RevPAR (Revenue Per Available Room)”: a key hotel metric that measures how efficiently a hotel generates revenues, calculated as: RevPAR = Occupancy Rate × Average Daily Rate (ADR)
“Risk-adjusted return”: return measure that accounts for the amount of risk taken. Higher risk-adjusted returns indicate better compensation for risk.
“Asymmetry”: a situation where the potential upside and downside of an investment are not equal—e.g., limited downside but large upside or vice versa.
“Unlevered”: carrying no debt.
“Qualitative overlay”: non-numerical, judgment-based inputs layered on top of a quantitative model (e.g., management quality, market intuition, competitive dynamics).
“Capital allocation”: how a company deploys its capital—buybacks, dividends, acquisitions, reinvestment, or debt reduction—to seek to maximize shareholder value.
“Terminal value”: the estimated value of an asset or business at the end of a projection period, often representing the majority of a discounted cash flow’s total value.
“Quantitative model”: a model using mathematical, statistical, or computational methods to analyze data and produce forecasts or valuations.
“Free cash flow (FCF)”: cash generated by a company after accounting for operating costs and necessary capital expenditures—cash available for dividends, buybacks, or debt repayment.
“Shrinking the float”: reducing the number of shares available in the market, typically through share buybacks; often increases earnings per share and ownership concentration.
“Short side”: refers to the bearish side of an investment whereby an investor expects an asset to decrease in value.
“Long”: an investment position that profits when the asset’s price rises.
“Alpha”: return generated in excess of a benchmark or expected return.
Carefully consider the Funds’ investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Fund’s Prospectus and Summary Prospectus, which may be obtained by visiting https://www.longpondetf.com/investor-materials. Read the Prospectus and Summary Prospectus carefully before investing.
Long Pond ETFs are distributed by Foreside Fund Services, LLC. Exchange Traded Concepts, LLC serves as the investment advisor; Long Pond Capital, LP serves as the sub-advisor. Foreside Fund Services, LLC. is not affiliated with Exchange Traded Concepts, LLC or any of its affiliates.
Investing involves risk, including possible loss of principal. The Fund’s return may not match or achieve a high degree of correlation with the return of the Index. To the extent the Fund’s investments are concentrated in or have significant exposure to a particular issuer, industry or group of industries, or asset class, the Fund may be more vulnerable to adverse events affecting such issuer, industry or group of industries, or asset class than if the Fund’s investments were more broadly diversified. Issuer-specific events, including changes in the financial condition of an issuer, can have a negative impact on the value of the Fund.
A new or smaller fund is subject to the risk that its performance may not represent how the fund is expected to or may perform in the long term. In addition, new funds have limited operating histories for investors to evaluate and new and smaller funds may not attract sufficient assets to achieve investment and trading efficiencies.
Shares are bought and sold at market price (closing price) not net asset value (NAV) and are not individually redeemed from the Fund. Market price returns are based on the midpoint of the bid/ask spread at 4:00pm Eastern Time (when NAV is normally determined) and do not represent the return you would receive if you traded at other times. Brokerage commissions will reduce returns. The Fund is an actively managed ETF, which is a fund that trades like other publicly traded securities.