What is a key characteristic of an opportunistic strategy?

An opportunistic strategy is characterized by taking advantage of market inefficiencies and opportunities that often come with higher levels of risk. This high-risk, high-return approach typically involves investing in real estate or other assets that may not be performing well, with the expectation that they can be improved or that market conditions will change favorably. Investors implement this strategy in pursuit of significant returns, recognizing that the associated risks are substantial but can lead to outsized gains if managed well.

The focus is often on assets that require significant capital investment for redevelopment or repositioning, which may not initially provide immediate cash flows but are expected to yield high returns once the value is realized. This contrasts with more conservative strategies that may seek steady income or long-term preservation of capital. By understanding this context, it becomes clear why the high-risk, high-return nature of such strategies aligns with the characteristics of opportunistic investment approaches.