JUNE 1, 2022

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Why investors might pursue diversified versus sector-specific strategies

by Kali Persall

Experts say investors’ decision to follow a diversified strategy versus sector-specific strategy depends on many differentiators, such as the size of the investor organization, risk/return appetite and desired portfolio weightings, to name a few. Amid the many nuances of the real estate market, one thing is clear: Different things work for different investors, and one size does not fit all. Better questions might be, what works well for which investors, and why?

Why pursue a diversified strategy?

Diversified strategies consider investments across all property types, strategies, geographies and throughout the capital stack, unlocking a range of opportunities that are carefully selected for the best risk-adjusted returns. This can be especially beneficial in the event of an economic downturn, to prevent market shocks from impacting the investment portfolio as a whole and reduce the volatility and risk of loss. Diversification can also be a powerful tool to maximize the

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