The appeal of UK core long-income real estate investing

Key Takeaways

• Strong inflation protection via lease indexation
• Proven liability matching and low volatility
• Out-performance versus other asset classes across all time series
• Driving positive change towards a low carbon economy

Defined Benefit (“DB”) Pension Schemes in the UK have traditionally sought required levels of investment return via investing across a balanced strategy, including conventional liquid investments such as bonds and equities, together with more illiquid alternative assets such as real estate, private equity and infrastructure. As DB schemes move towards maturity, the need to de-risk typically skews investment portfolios towards the security and certainty of fixed income. At the same time, reducing inflows increase trustee focus on liquidity.