Accordant launches registered interval fund for private real estate investment
A new venture from private wealth adviser Accordant Investments and sub-adviser IDR Investment Management will offer individual investors a registered interval fund product that tracks the performance of private real estate funds. Accordant ODCE Index Fund trades under ticker symbol ODCEX and tracks the NCREIF Fund Index – Open-end Diversified Core Equity (NFI-ODCE) on a net-of-fees basis.
Many institutional investors allocate a portion of their portfolios to investment in private real estate, typically 10 percent of total fund assets, using a variety of structures, from closed- and open-end funds to separately managed accounts and joint ventures. The U.S. institutional real estate market is more than $8.4 trillion, according to the Pension Real Estate Association, including $1.8 trillion in the private equity segment.
But individual investors have had difficulty accessing the benefits of investing in private real estate, given the available products, and Accordant is meeting that market need with the ODCEX interval fund.
“Investors can now participate in an indexing strategy previously limited only to institutional investors,” said Greg Stark, CEO of Accordant. “Through our affiliation with IDR, the innovators and patent holders behind the first index fund for private real estate, the fund is designed to provide exposure and streamline investor access to real estate investment vehicles and may provide you with a steady source of income, broader portfolio diversification and attractive risk-adjusted returns.”
The NFI-ODCE is the dominant benchmark index for U.S. institutional investors, comprising 26 private open-end real estate funds that invest with a core strategy in diversified portfolios of real estate. The capitalization-weighted index represented net assets of $254 billion, as of first quarter 2023.
Garrett Zdolshek, portfolio manager for Accordant added, “IDR has been successfully executing an ODCE index strategy for nearly five years with an institutional fund, making us enthusiastic that our fund will have an equal appeal to a broader group of investors.”