Real estate, alternative real assets and other diversions

Consilia Capital Real Assets Monitor – Quarterly Performance Review

The Fund Manager

The report is divided into the following sections:

1)       A summary of  Fund  performance 

The table below shows the average March 2019, Q1 2019 and 5 year returns for the mandates in our database.  As can be seen, the benefit of the US interest rate led rally  was felt most significantly in the Q1 2019 numbers for US Funds and Income Funds (> +14%). In March it was the turn of the Regional Infrastructure Funds to see a significant improvement (+8%).  It is interesting to note that for Global Real Estate Funds and Global Infrastructure Funds the Q1 rally was equivalent to 50-60% of the 5 year returns.  

2)       Focus : Quarterly  Performance Review (p3)

This month we look at the Q1 2019 performance of our different fund mandates and establish that:

i)                     Across the mandates around 75% of averageQ1 returns were established in January. Europe was the most front end loaded with a Jan return of 10.2% vs a Q1 return of 11.2%. 

ii)                   Global real estate outperformed global infrastructure in January, March and Q1.

iii)                  Large funds outperformed small funds for Global Real Estate, US Real Estate, Income and Regional Infrastructure. Small Funds outperformed larger funds in Asia, Europe, and Global Infrastructure.

iv)                  On a 5 year basis returns for Income and Regional Infrastructure Funds are ahead of Global Real Estate, which is ahead of Global Infrastructure

v)                   In Q1 (with the exceptions of Global Infrastructure and the US Funds) actively managed large funds outperformed passive funds

vi)                  In terms of alternative strategies, the obvious best performers were the leveraged bull strategies (+39%) and the worst performers were the leveraged bear strategies (-32%). Elsewhere, Housebuilders (+19%) and Active ETF strategies (+17%) produced the highest returns in Q1. 

3)       Detailed performance statistics by mandate for Q1 2019 (p6)

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About Alex Moss

Alex Moss

Alex is responsible for developing the newly created Centre for Real Estate Research at Cass Business School. He also runs Consilia Capital, a research and advisory firm, which specialises in the performance and strategies of real estate, infrastructure and real asset funds, work that combines academic research with practical applications. He has been involved in research and transactions in the global real estate sector for over 30 years. His career has encompassed sell side research (BZW, Macquarie), investment banking (CSFB), private equity (Apax Partners Capital), and fund management (M&G and Investec). He is Chairman of the EPRA Research Committee, a member of the EPRA Advisory Board, and Chairman of the Investment Committee for the Investec Global Real Estate Securities Fund, where he acts as a consultant. Alex is best known for his academic and commercial work in the area of Global REITs, and their use in investment strategies. In 2013, with Professor Andrew Baum they produced two innovative papers for EPRA which received wide acclaim, looking at whether listed real estate was managed as part of the real estate allocation, and the wider use and applications of listed real estate securities in asset management. His work with Kieran Farrelly on combining direct and listed property for Defined Contribution Pension schemes won a Best Paper award at the 2014 ERES conference. A particular area of interest is the use of Smart Beta and automated trading strategies, most notably Trend Following and Momentum, and his work in this area with Professor Andrew Clare and Professor Steve Thomas has been widely cited. In 2017, with Reitsmarket he produced two multifactor Global REIT Smart Beta indices, which are listed on Euronext, and marketed by Goldman Sachs. Most recently he has been concentrating on the use of listed real estate within real asset strategies.

Articles by Alex Moss

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