Institutional investors are increasing allocations to real assets, with about $60 million in top-up funds invested in Principle Global Investors this week.
Increased allocations align with the fund manager’s CREATE report released in June, which found institutions were looking at real assets such as property, infrastructure and commodities as a way to diversify away from traditional allocation strategies.
Simon Hedger, Principle Global Investors senior analyst, property securities, said the company had received investment into global REITS from all over the world, including Australia.
The appeal of REITs to the western world has grown as populations age and income grows in importance, according to Hedger, who claimed Principle had received the first allocation ever by a German pension fund to listed REITS.
Hedger said he expected to see interest continue to grow: the earnings growth profile of listed stocks indicated a return of 10 per cent in the next 12 months, he said.
“It [the global REIT sector] has been steady and reliable in the overall risk/return profile and that’s what a pension fund should be looking to do - match its assets with longer-term liabilities,” he said.
“Things are really moving along in the sector - there’s new opportunities with new companies opening, the sector’s getting bigger, it’s got a decent yield and that makes it really attractive to pension funds,” Hedger said.
The asset manager is bolstering its investments in the global energy transition and climate opportunities.
The ethical investment manager has reported record FUM as its growth trajectory continues apace.
The chief investment officers of UniSuper, HESTA, and TelstraSuper have elaborated on opportunities and risks that are top of mind when it comes to illiquid assets like private credit within their portfolios.
In an address to the National Press Club last week, the incoming chair of Australia’s sovereign wealth fund said institutional investors could play a role in the winding road towards net zero.
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