Cohen & Steers has teamed up with IDR Investment Management to allow investors to invest in listed and private real estate in a single portfolio, providing the potential to capitalise on valuation mispricing in each market.
The strategy will combine the listed real estate management of Cohen & Steers and IDR’s patented process for replicating the NCREIF Open-end Diversified Core Equity index (NFI-ODCE Index), while incorporating the flexibility to adjust allocations between both.
IDR is known for the IDR Core Property Index Fund, which tracks the NFI-ODCE Index.
Target assets will include a broader range of sectors and property types, including data centres, cell towers and healthcare facilities as well as established ODCE sectors like industrial and residential, the companies said.
Jon Cheigh, president and CIO of Cohen & Steers, said: “There is a lead-lag dynamic in real estate investing in which listed performance leads private in both downturns and recoveries, creating pricing differential opportunities for investors.
“By blending listed and private real estate in a single strategy, we can help investors capitalise on valuation mismatches between listed and private, delivering the potential for higher total returns and better liquidity.”
Garrett Zdolshek, CIO of IDR, said: “We are passionate about the benefits that indexing core private real estate provides investors as a tool to help them achieve their investment objectives.
“We believe this strategy presents investors with an innovative and holistic solution for managing their listed and private core real estate allocations. Cohen & Steers’ long-term track record of generating alpha and the firm’s steadfast commitment to excellence makes them the ideal partner for this strategy.”
To read the latest IPE Real Assets magazine click here.
