OCTOBER 7, 2024 | PIONLINE.COM | $16 AN ISSUE / $350 A YEAR
S P E C I A L R E P O RT R E A L E S TAT E M A N AG E R S
Amid yet another down year, Fed cut sparks optimism Global assets dropped 4.4% to $1.82 trillion, while U.S. institutional assets fell 7.1% to $690.3 billion While the Federal Reserve’s 50-basispoint interest rate cut might be giving some real estate managers hope for a better tomorrow, the real estate picture over the 12 months ended June 30 was more disheartening with managers’ global assets under management down 4.4% to $1.82 trillion, Pensions & Investments’ most recent real estate manager survey results show. Real estate AUM managed for U.S. tax-exempt institutions fell by 7.1% to $690.3 billion. This is the third year the global AUM of the top real estate money managers responding to Pensions & Investments’ annual survey has been lackluster, starting with a 0.4% increase in the year ended June 30, 2022, and down 2.9% in the 12 months ended June 30, 2023. “The Fed initiating the cutting cycle signals financing costs will likely come down, which should boost buyer and seller activity,” said Jon Pliner, managing director, investments and U.S. head of delegated portfolio management at Willis Towers Watson. “It is definitely an inflection point for property markets.”
More on real estate managers ■ P&I ranks the largest real estate
managers. Page 16
■ Managers hitting potholes on the
fundraising trail. Page 14
■ Credit strategies the lone bright
spot in a tough year. Page 15
■ For the full report, including a full
data set, go to PIonline.com/ realestate2024
But during the survey period, real estate managers were still contending with the fallout from another year of slow transactions, anemic fundraising, higher interest rates, stagnant rental growth and paltry returns, industry insiders said. The main theme over the past 12 months was “uncertainty regarding when and to what magnitude property values would fully reflect the higher-rate environment,” Pliner said “It appears we are nearing the end of the downward repricing cycle, assuming interest rates remain stable or
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B y ARLEEN JACOBIUS
SEE MANAGERS ON PAGE 26
Pension Funds
Investing
North Dakota board’s goal: building up to 50% internal No go on permanent COLAs for B y DOUGLAS APPELL The North Dakota State Investment Board is moving to harness the fast-paced growth of the state’s institutional investment pools to build advanced in-house asset management capabilities in Bismarck. Scott M. Anderson, the State of Wisconsin Investment Board veteran who joined North Dakota as chief investment officer in 2022, said that effort could see the internally managed portion of the $22 billion in assets the State Invest-
ment Board oversees on behalf of 31 state clients go to as high as 50% from zero over the coming five years or so. An ambitious goal, perhaps, for an organization that didn’t have a governance committee as recently as five years ago, but not necessarily out of place for one whose tagline is “Be Legendary,” and whose executives talk about pursuing “big, hairy, audacious goals.” Anderson paints SIB’s plan to build out internal capabilities now as a natural rite of passage in the SEE INTERNAL ON PAGE 23
Ohio Teachers, ex-actuary says B y ROB KOZLOWSKI
HOME COOKING: North Dakota State In-
vestment Board’s Scott M. Anderson
The Ohio State Teachers’ Retirement System cannot invest its way to a permanent COLA, Brian Grinnell, former chief actuary of the $97.3 billion pension fund, told Pensions & Investments. Grinnell left the pension fund in May after more than 10 years as its chief actuary. In a Sept. 27 interview, he said his responsibilities were primarily to help STRS staff and the board understand the risks the pension fund has faced and help devel-
SOUND BITE NUVEEN’S SAIRA MALIK: ‘I’ve
loved the market since I was a teenager.’ Page 3
op a forward-looking plan to make decisions with long-term outcomes in mind. In his interview, he said, “I was not comfortable with the direction the plan was headed, and I didn’t feel like my continued participation would be positive.” The pension fund has been beset by controversy for several years after a group of retired teachers, represented by advocacy organization the Ohio Retirement for Teachers Association, launched an aggressive SEE COLAS ON PAGE 21
Setting stakes in the Middle East Money managers are putting boots on the ground in the region, looking to build long-term relationships. Page 3