The Pension Real Estate Association (PREA) and Investment Property Databank (IPD) have agreed to co-sponsor a US Property Fund Index that will measure real estate investment performance for open-end, commingled funds.
The new index will encompass the entire risk spectrum of core, value-add and opportunistic strategies, as well as both diversified and sector specific funds. The PREA|IPD US Property Fund Index will become a component of the IPD Global Property Fund Index, enabling IPD clients and PREA members to evaluate their performance in a global context.
Ted Eliopoulos, Senior Investment Officer for the California Public Employees' Retirement System (CalPERS) and Chairman of the PREA Board of Directors stated that "PREA is looking forward to our co-sponsorship with IPD on the PREA|IPD US Property Fund Index. Not only will the US Property Fund Index increase transparency for the asset class in general, but our new relationship will provide significant benefits for PREA members."
Gail Haynes, President of PREA, added that "As part of the agreement with IPD, PREA members will have access to a significant amount of information underlying the headline index numbers. This will allow our members to delve into the specific aspects of fund structure that are driving returns, and how performance varies across location and property type."
Further, Haynes noted that "Given PREA's mission of sponsoring objective forums for education, research, and industry communication, creating this co-sponsorship relationship with IPD, whose objective is the unbiased collection and analysis of real estate data on a global basis, is a logical step in continuing to serve the needs of the industry."
According to Jim Valente, Director of Performance & Risk Analytics for IPD North America, "We are pleased to work with PREA and anticipate that the institutional real estate community will benefit in a number of ways from our co-sponsorship of the PREA|IPD US Property Fund Index.
"These include enhanced attractiveness of real estate as an asset class through increased transparency and the addition of the important US market to global fund benchmarks which provides for consistent global benchmarking; a greater understanding of the impact of active management through the direct link between a fund's performance and the performance of the underlying direct real estate; and access for PREA members to investment performance benchmarks and indices and a wealth of underlying performance and risk data."
IPD's Managing Director for North America, Simon Fairchild, indicated that "IPD is confident that the PREA|IPD US Property Fund Index will be a major addition to the IPD Global Property Fund Index, and that this will result in benefits for all PREA members."
The tentative target date for having the PREA|IPD US Property Fund Index up and running is mid-August, 2012. Once complete, the PREA|IPD Property Fund Index will join seven other property fund indices that IPD currently offers UK, France, Germany, Italy, Nordics, Pan-European, and Australia.
Source: Pension Real Estate Association