Henley Visiting Professor Looks at Real Estate in Pension Funds

A visiting professor at Henley Business School-University of Reading published research on real estate allocations in pension funds in a recent issue of the EPRA (European Public Real Estate Association) newsletter, according to a press release from Henley.

Alex Moss is a visiting professor in real estate and planning at Henley. He also founded Consilia Capital, a London-based research and advisory firm, and is chairman of the Investment Committee for the Investec GSF Global Real Estate Securities Fund.

Moss’ newsletter contribution is titled “The Blended Approach to Real Estate Allocations: A German Case Study.”

In the article, Moss writes that the average property allocation in German pension funds is 9 percent. His goal was “to determine whether the performance of the property allocation … could be improved by adding a listed (global) element to the portfolio.” The paper used the MSCI Spezialfonds Index in its case study.

Among the conclusions: Blending a 30 percent global listed portfolio with a 70 percent allocation to Spezialfonds increased performance, with only a 6.53 percent increase in volatility, Moss writes.

He concludes the article by stating: “The results show clearly how increasing the listed element of the real estate allocation, particularly applying Trend Following, can benefit overall portfolio performance with an improvement in both the raw return (from 7.66 percent to 8.28 percent) and the Sharpe Ratio (from 0.91 to 0.98) of the multi-asset portfolio.”

The full paper that the article is based on is available at www.epra.com/research.

In addition to full-time, executive and flexible executive MBA programs, Henley also offers a master’s program in real estate.

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