A gradual revolution is changing how the world’s largest pools of capital think about asset allocation. For real estate professionals, that is both a threat and an opportunity.
In simple terms, strategic asset allocation (SAA) defines a well-balanced portfolio allocation framework. However, allocators are increasingly moving to a total portfolio approach (TPA), which is about running the whole portfolio as a single, integrated decision-making engine, particularly since the publication of the CAIA Association’s Portfolio for the Future in 2022. Understanding the impacts of this shift is important, as many of the earlier adopters of TPA have historically been large investors in real estate, including many of Canada’s Maple Eight (e.g. CPP Investments), the Australians (e.g. Future Fund) and Singapore’s GIC. More recently, the California Public Employees’ Retirement System (CalPERS) announced its adoption of TPA, likely to be the first of many US public pensio
