Real estate investing has always been a data-driven discipline. Wealth advisers, family offices and private-client CIOs rely on performance numbers to evaluate managers, compare strategies and guide clients toward informed decisions. But in private real estate, infrastructure and other real asset class focused investment programs, performance numbers often look more precise than they really are.
The problem isn’t the math. It’s the inputs. Real estate and infrastructure, for example, are illiquid appraisal-based asset classes. Properties and assets don’t trade daily, valuations aren’t standardized and managers differ widely in how they treat expenses, capital improvements, fees and cash flow timing. As a result, two investments with identical economics can produce very different performance numbers depending on how the data is defined and reported.
For advisers, this creates a real challenge: How do you compare managers when the numbers themselves a
