For at least a few decades, we’ve been talking about how the cow that most of the investment managers out there have been milking (the defined benefit pension fund cow) has been getting skinnier and skinnier. (Those of you who are familiar with the background can skip ahead to page 34, where I outline a new solution.)

When I entered the real estate investment business in 1979, the majority of pension fund capital was coming from the corporate pension plan side of the market. Most public pension funds at the time were constrained by law to investing in what were euphemistically referred to as “the legal list of securities”, composed predominantly of government bonds and blue-chip stock and bond issues. While a handful of Taft-Hartley funds were allocating capital to real property investments, much of that capital was earmarked to stimulate the creation of union jobs. Then, as now, the Taft-Hartley sector represented a relatively small slice of the total pension fund mark