estate is already widely recognized as an important asset class in most
comprehensive investment solutions—including defined benefit (DB)
retirement plans, endowments, trusts and foundations. In the DC
universe, however, most plan participants currently have little to no
opportunity to tap into real estate investments within their plans.
facilitate broader inclusion of real estate vehicles within DC plans,
DCREC has undertaken a number of independent research studies that
illustrate the value of including real estate investments in DC plans.
In 2014, a DCREC report analyzed
for the first time the impact of adding a real estate allocation into a
broad range of DC portfolios. This study found that adding a 10 percent
mix of private and public real estate into a traditional 60/40
stock/bond blend enhanced the risk/return profile, dampened volatility
and resulted in improved outcomes for participants.
embarked on a second groundbreaking analysis in 2015 that will be
repeated on an ongoing basis to track industry growth and product
expansion. By surveying investment managers to determine the size and
scope of available real estate products within DC plans, DCREC was able
to establish a baseline for real estate assets under management in the
1 December 2016
DCREC Real Estate Allocation in the DC Lifecycle: A Dynamic Approach