In the October 2017 edition of Institutional Real Estate Asia Pacific, you’ll find an article by Steve Bergsman on real estate’s role in the portfolio (page 23), and in this issue (also page 23), you’ll find another pertinent feature by Roy Schneiderman on the potential dangers inherent in overreliance on benchmarks.

Bergsman and the people he interviewed for his feature point to the fact today’s low-yield environment is the primary force driving today’s higher allocations to real estate and other alternatives. Bergsman also points out some investors are drawing on the higher cashflows real estate can deliver as a proxy for what’s missing in their bond portfolios.

History would tend to support this view. When I was in the process of founding Institutional Real Estate, Inc 30 years ago (in June 1987), AAA corporate bond yields in the United States were hovering around 9.32 percent. Given most public pension funds were actuarially underwritten somewh