Research on the UK listed sector

The performance of a blended real estate portfolio for UK DC investors

Alex Moss, Consilia Capital & Cass Business School, City University, London, UK, and
Kieran Farrelly, The Townsend Group, London, UK are investigating the implications for UK DC pension fund investors who choose to combine global listed and UK unlisted real estate in a blended allocation relative to a pure unlisted solution.

A UK DC pension fund investor choosing to construct a blended global listed and UK unlisted real estate portfolio would have experienced material return enhancement relative to a pure unlisted solution. The “price” of this enhanced performance and improved liquidity profile is, unsurprisingly, higher portfolio volatility. However, because of the improved returns, the impact upon measured risk adjusted returns is less significant.

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