IPF Commissions Further Research into Defined Contribution Exposure to Real Estate
20 Oct 2017
The IPF has commissioned Spence Johnson to undertake an investigation of the current scale and appetite for real estate in DC. This follows on from the original Pensions Institute study, Returning to the Core: Rediscovering a Role for Real Estate in Defined Contribution Pension Schemes, which established the case for real estate (RE) as a core investment within DC.
In seeking to cast light on an area of the market where little data has been available to date, the project will explore the current status of real estate investment in UK pensions and address a number of issues, including:
• Who the key DC schemes are that are invested in RE and what capital they control overall;
• How much they allocate to RE, both within default funds and self-selecting investor portfolios;
• How RE is defined and how much of that investment in DC is indirect, via, for example, diversified growth funds; and
• What the main barrier/constraints are to investing in RE, including the impact of the member charge cap.
Greg Mansell, Head of Research at AXA IM – Real Assets, is chairing the IPF’s Project Steering Group (PSG) that will oversee the research. He commented: “This study will give the real estate industry valuable insights into how UK defined contribution pension schemes are investing in real estate. Surveying the UK’s largest pension schemes is the best way for real estate professionals to understand pension schemes’ needs and how real estate can help meet those needs.”
Other members of the PSG comprise Anne Breen, Aberdeen Standard Investments, Mark Bunney, Kames Capital, and Rob Martin, LGIM. The report, with the working title Real Estate in Defined Pension Scheme Investment, is due to be published in the new year.