Are Multi-Family Properties a Boon for Pension Funds? - new article by Martin Hoesli and Louis Johner in the Property Chronicle
The share of real estate in pension portfolios has been increasing over time. The rationale for this increased allocation has often been the investors’ desire for stable returns, which has translated in a sustained interest for multi-family properties.
While much research has documented the role of real estate in diversifying a mixed-asset portfolio, focusing on diversification benefits only is not sufficient as the primary objective of pension funds is to meet their future liabilities. Though some studies that analyse the benefits of real estate in an asset-liability management context exist, they typically rely on data that cover two or three decades only. Hence, there is a lack of evidence on whether real estate is useful in a pension portfolio when other economic environments are considered. Such analysis requires the use of much longer returns time series, which seldom exist for real estate.
In a recent paper (“The role of multi-family properties in hedging pension liability risk: long-run evidence”), GFRI's Professor Martin Hoesli, our PhD student Louis Johner and their co-author Jon Lekander intended to fill this gap and provide for a better understanding of the benefits through time of holding income-producing residential real estate in a pension fund portfolio.
To read more about this study >
For an article that was published recently on this research in The Property Chronicle >
May 6, 2024