Publications

- February 1, 2021: Vol. 33, Number 2

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Keep ’em separated: Investors face different considerations with real estate separate accounts

by Loretta Clodfelter

Most investment vehicles come with their own set of pros and cons, and separately managed accounts are no exception. For many large institutional investors, real estate separate accounts bring greater flexibility, control and alignment of interests — all with lower fees. But to achieve diversification, separate accounts require substantial commitments, keeping them out of reach for smaller investors. And with greater control comes greater time commitment, and not all investors are staffed to handle the challenge.

“Institutional investors have increasingly been looking for alternatives to discretionary fund investing,” says Reid Bourgeois, CFO at Transwestern Investment Group. He notes the two most common structures to accomplish this have been through co-investments and separately managed accounts. “These structures offer a variety of benefits to the investor, including increased control over the investment allocation process, reduced fees, ability to control the amou

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