Real estate, alternative real assets and other diversions

Consilia Capital Real Assets Monitor Period end - September 2018

The Economist

1) A summary of Q3 performance

As can be seen from the table below, (which is ranked by average Q3 returns for each main mandate) The third quarter proved a difficult one, with only Income Funds moving into positive territory, and average YTD returns now all negative.

2) Fund Flows

September saw outflows for both active and passive global real estate funds, while real assets funds saw modest inflows.

As part of our interest in analysing the importance of fund flows on performance we have grouped together the largest funds in our database for each of the major mandates to determine the general direction of flows. The mandates we have chosen are: Global Real Estate (Active and Passive), Global Infrastructure, Income, and Real Assets. We have then summed the daily flows to provide a monthly (net) total with a view to providing an indication of the trend over time. We are aware that there are some potential flaws, namely that we have only used a sample of funds, and that we have not included US Funds which are a particularly active market. However, we believe that the charts below are useful trend indicators and we will be publishing them on a regular basis going forward.

After a brief period of inflows in July, global real estate funds saw outflows in August and September.

Real assets fund continue to see modest inflows.

The Economist

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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