Real estate is evolving fast as increased global investment opportunities emerge. Property prices in key markets have begun a tentative upswing that may offer scope for capital gain. There is also evidence of rental growth in some locations, which has had a positive effect on capital values. However, as the effects of the global financial crisis continue to be felt, investors are demanding greater control over their investments. This paper examines the opportunities and challenges facing institutional investors, as well as favoured strategies in the current market.
Asset Classes
Real Estate: New Opportunities for Institutional Investors
State Street, State Street Sponsored Research
Asset Classes
Nest favours institutional-first managers as retail exodus pressures private credit
Nest, the largest workplace pension in the UK, says that private credit managers who prioritise institutional clients will be more favourably viewed. The £61 billion ($82 billion) fund has awarded a £450 million ($605 million) US direct lending mandate to Crescent Capital this month, citing the manager's institutional-client-first approach as a key attraction.
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CalPERS prepares for market dislocation
CalPERS' CIO Ben Meng is preparing for a market dislocation by ensuring the $354 billion pension fund has enough dry powder on hand to take advantage of a drawdown. A liquidity management action plan is a top priority for the fund.
UK’s PIC sees strong renewables pipeline
The United Kingdom’s £31.4 billion ($39 billion) Pension Insurance Corporation, an insurance company specialising in securing the liabilities of defined benefit pension schemes, is growing its infrastructure allocation to renewables and student housing and pushing into new markets in the Ireland and Spain.
LPs failing engagement in private equity
Engagement and stewardship in private equity has been left out in the cold. This is strange for an asset class with high returns and where the foundation is already in place for the asset manager to act on behalf of the asset owner for strong engagement. Bob Eccles encourages more action.
Do mega private equity funds deliver?
Are private equity mega funds in a category by themselves? Cambridge Associate's Andrea Auerbach argues they are, but not for the reasons that investors may think.
Spain’s Caixa boosts risk off allocation
In an overhaul of investments impacting almost every asset class, Spain’s largest corporate pension fund, is looking to increase diversification and improve its ESG ratings. It’s decreased equities in favour of US government bonds as part of a strategy to protect the portfolio in a potential downturn, this strategy also includes tail risk hedging, currency hedging and slashing its hedge funds allocation.
Infra performance benchmarks wanting
The EDHECinfra/G20 survey of infrastructure benchmarking practices, which included representatives of 130 asset owners accounting for $10 trillion, has found that existing performance monitoring benchmarks are self-defeating for asset owners and managers. But improvement, in the form of a more representative, better defined benchmark, may be possible thanks to recent progress.
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