Publications

- April 1, 2015: Vol. 2, Number 4

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Objectives, Benchmarks Key to Real Assets Investing: Growing interest in real assets investing requires keen understanding of risks and ultimate objectives.

by Kathryn Leaf Wilmes

 

Following the Great Financial Crisis in 2008, there has been a surge of interest in real assets. A survey undertaken by The Economist Intelligence Unit of over 200 institutional investors found that almost half of the respondents have increased their allocations to real assets over the past three years, and 60 percent of institutional investors plan to increase allocations in the near-term.

The challenge facing new investors is how to access the asset class and address the diversity of the opportunity set. Establishing program objectives and appropriate benchmarks is key to any investment strategy in this heterogeneous asset class.

WHAT IS DRIVING INVESTOR INTEREST?

The hunt for yield is driving interest in real assets as low interest rates catalyze investors to look elsewhere for current income. Historically, a number of the real asset subsectors (for example, infrastructure, real estate and asset-backed strategies) have

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