One of the big questions for investors is how much discretion to give the manager of a separate account. With a nondiscretionary account, the investor has complete control over investment decisions — but that also means being on the hook for making decisions quickly. For many large public pension plans, that can be a challenge.
“There are different levels of discretion,” says Eric Smith, executive vice president of L&B Realty Advisors. “It’s also highly collaborative,” he adds, “a tremendous amount of communication.” L&B focuses on separately managed accounts.
The level of operational challenges varies both with the role separate accounts play within an investor’s greater real estate portfolio and the structure of the separate account, notes Denis Curran, managing director and portfolio manager with Ascentris. Ascentris manages multiple separate accounts, with a total of more than $1.9 billion in assets under management.
“We generally
