Defining the Value and the Role that Real Assets Can Play in Today’s Institutional Portfolios

In a recent (May 2016) survey of very large institutional investors, 65% of responding allocators reported their belief than more than 40% of an institution’s assets have to be illiquid to get to “historical” returns expectations. Is this an indication of the growing need for institutions to allocate to real assets strategies and assets, many of which are illiquid? Which sectors within the real assets “bucket” will be of greatest value to investors in 2017 and subsequent years? As the traditional fixed income and equity markets prove unable to deliver the returns that institutions need to meet their liabilities, it is almost certain that allocations to these assets will increase. But which sectors, strategies and opportunities will investors seek the most value in?

For instance, in an even more recent (July 2016) survey of allocators, 52% of respondents stated that they are interested in and actively researching opportunities in infrastructure. With many governments – including both Presidential candidates in the US – looking to increase public spending on infrastructure projects, the set of investable opportunities is likely to rise along with demand. Similarly, investors demonstrated interest in private equity, private debt/credit, and high conviction equity strategies, which play a large role in many real assets strategies, substantiate that these strategies as well are likely to be among the most important opportunities institutional investors are weighing this year.

Advisory Board

Marcus Frampton, Director of Investments, Private Markets, Alaska Permanent Fund Corporation
Alisa Mall, Director of Investments, Carnegie Corporation of NY
Caixia Ziegler, Associate Director, Head of Real Estate, Ford Foundation
William Proom, Managing Director, Maine Public Employees Retirement System
Edward Mikolay, Senior Investment Officer and Director of Private Markets, Municipal Employees Retirement System of Michigan
Lodge Gillespie, Director-Real Assets, National Railroad Retirement Investment Trust
Petya Nikolova, Head of Infrastructure Investments, NYC Retirement Systems
Ryan Bisch, Director, Private Markets, Ontario Power Generation
Mike Mueller, Investment Officer, Oregon State Treasury
Bryan Bedard, Manager, Infrastructure Investments, PSP Investments
John Ritter, Director, Energy and Natural Resources, Teachers Retirement System of Texas
Tom Masthay, Director of Real Assets, Texas Municipal Retirement System
Brian Johnson, Managing Director, University of Southern California
Mark Warner, Senior Managing Director - Natural Resources, Emerging Markets & Lower/Middle Markets, UTIMCO
Chris Culbertson, Investment Director, Wake Forest University/Verger Capital Management
Tom Coleman, Portfolio Manager, Real Assets, Virginia Retirement System
John Graves, Assistant Senior Investment Officer - Tangible Assets, Washington State Investment Board

Lead Sponsors

Aberdeen Asset Management
Brookfield Investment Management
Cohen & Steers
CoreCommodity Management LLC
Deutsche Asset Management
Nuveen Asset Management
SummerHaven Investment Management
Van Eck Global

Energy Sponsor

Merit Energy Company