This study aims to determine if specialization led to higher financial performance for European non-listed real estate funds. Funds may either specialize in a particular country and/or property type or manage a broadly diversified portfolio. The findings suggest that after adjusting for relevant performance drivers, both country specialization and country-sector specialization are associated with superior returns while sector specialization is not. The outperformance of country and country-sector specialist funds was particularly pronounced during the recovery and growth period of European real estate markets from 2010 to 2019.