Global REITs meet diversification needs: Patrick Halter
Investors making the decision to allocate to listed property are looking beyond a single-strategy portfolio to meet their financial needs and want to diversify across a larger selection of assets, according to Principal Global Investors executive director of real estate Patrick Halter.
Rather than meeting a specific mandate, most investors are looking to solve a problem, whether that is to boost income or to build a more diversified portfolio by investing outside of local strategies - and they want fund managers with a wide array of investment options to do it, he said.
In Australia, for example, there are a limited number of real estate investment trusts (REITs) on offer but, from a global perspective, there are in excess of 900, he said.
"Investors want diversification relative to other asset classes, but also diversification within REITs," Halter said.
"They also have a desire to be part of economic systems that are in some ways defensive and in some ways offensive - so depending upon demographics and economic growth they like to have the ability to move fairly quickly into other markets, and that's what global REITs provide because the liquidity is good."
He said investors today are risk-averse and are demanding strategies that they can understand.
According to Halter, global REITs are transparent enough so that investors are aware of where cash flows are coming from and can generate a steady income in the process.
Recommended for you
The Financial Services Council has appointed a new deputy chair for its board.
ASIC chair Joe Longo has told compliance professionals they need an “attitude of compliance” beyond written policies, how can AFSLs achieve this without alienating their advisers?
Peri and menopause training founder and TV journalist Shelly Horton has hit back at calls for businesses to introduce menopause leave.
Pendal has told investors it will start winding up its Enhanced Credit fund from December, its third fund closure this year.