PT  - JOURNAL ARTICLE
AU  - Aleksandar Andonov
AU  - Nils Kok
AU  - Piet Eichholtz
TI  - A Global Perspective on Pension Fund Investments<br/>in Real Estate
AID  - 10.3905/jpm.2013.39.5.032
DP  - 2013 Sep 30
TA  - The Journal of Portfolio Management
PG  - 32--42
VI  - 39
IP  - 5
4099  - https://pm-research.com/content/39/5/32.short
4100  - https://pm-research.com/content/39/5/32.full
AB  - Real estate is the third-largest asset class for institutional investors, but research into the performance of pension fund investments in real estate is scant. This article employs a unique set of data, the CEM database, to study the real estate investment approach, cost, and performance for a global panel of almost a thousand pension funds. The results show that smaller pension funds invest primarily in direct real estate, through external managers and fund-offunds, and are likely to disregard listed property companies in their real estate allocation. Larger pension funds are more likely to invest in real estate internally, exhibit lower costs, and achieve higher net returns. Internal real estate investment management is associated with lower costs and disproportionally higher returns. Finally, we document that U.S. pension plans’ real estate investments significantly underperform both their benchmarks and their foreign peers.TOPICS: Real estate, pension funds, equity portfolio management