Research and education are a vital part of the DCREC mission. We are the leading provider of independent, academic research that explores the role of real estate in defined contribution plans, and the impact of this asset class on investor behavior and long-term portfolio returns.
Defined Contribution (DC) plan sponsors continue to look for innovative solutions to help enhance participant outcomes, and one area of emerging interest is in private real estate debt. Even after the broad increases in interest rates over the past few years, bond yields generally remain below historical, long-term averages, and the considerable volatility exhibited across many publicly traded fixed income markets as monetary policy tightened, further constrained returns. With this in mind, private real estate debt strategies can offer a compelling way to expand credit diversification, potentially increasing and stabilizing investment income generation and introducing a hedge against interest-rate and inflation risks, when included as part of a multi-asset portfolio or broader fixed income strategy.
Produced for the fifth year, the Private Real Estate in Defined Contribution Survey is released in partnership with DCREC (the Defined Contribution Real Estate Council), NAREIM (the National Association of Real Estate Investment Managers), NCREIF (the National Council of Real Estate Investment Fiduciaries) and PREA (the Pension Real Estate Association).
For decades, defined benefit (DB) pension plans have been successfully allocating to real estate assets, both publicly traded and privately held securities, within their investment portfolios. This is because most DB pension plans consider real estate a fundamental asset class with unique investment attributes and return drivers and believe it should be included as part of well-diversified portfolios along with stocks, bonds and cash.
A comprehensive study of DC capital raising, structuring and enterprise benchmarking metrics in the real estate investment management industry.
A comprehensive study of DC capital raising, structuring and enterprise benchmarking metrics in the real estate investment management industry.
Three reasons why plans are rethinking real estate allocations to help strengthen participant outcomes.
A comprehensive study of DC capital raising, structuring and enterprise benchmarking metrics in the real estate investment management industry.
A comprehensive study of DC capital raising, structuring and enterprise benchmarking metrics in the real estate investment management industry.
Illiquid investments within DC plans have historically not been part of the investment line-up, whereas within Defined Benefit (DB) plans, illiquid alternative investments such as private real estate, private equity, hedge funds, etc. have been widely accepted as part of the asset allocation.
As defined contribution (DC) plan sponsors warm to the idea of incorporating illiquid investments into investment strategies offered on their menus, DCREC offers an explanation of the vehicle largely facilitating this shift—the white label fund.
The dominant investment-related trend in the defined contribution (DC) market continues to be the growing use of target-date funds (TDFs) and other asset allocation products.
When presenting investors with the concept of investing in real estate within their defined contribution (DC) plans,
some may argue that real estate—in the form of the family home—already comprises a significant proportion of their total wealth (and debt!). With that in mind, they may be wondering why they would consider allocating more of their assets to real estate.
Real estate investing has had a long history within defined benefit (DB) plans. For defined contribution (DC) plan sponsors, however, real estate represents a relatively nascent concept. The global shift from DB to DC retirement plans has provided an expanding investor base for real estate, with growth in cross-border investing since the recovery after the global financial market crisis almost a decade ago.
In this report, we test the investment case for real estate, as an asset class, to be included in defined contribution (DC) plans. We compare
assets allocations with exposure to real estate against traditional equity/fixed income asset allocation strategies. We find that allocating to both listed and unlisted real estate assets in retirement portfolios can enhance the risk-return profile of DC investment designs and improve the probability of successfully achieving desired retirement outcomes.
The purpose of this paper is to address perceived operational complexities and provide confidence to fiduciaries, record keepers, custodians and other administrative service providers in accessing and administering less liquid options in a daily valued environment.
DCREC surveyed its members to gain insights on adherence to the current 10 Key Principles for Daily Valuation. The enclosed visual depicts that 100% of respondents with a daily valued product comply with the current principles.
A guide to understanding best practices in daily valuation covering topics such as incorporating third-party appraisals, establishing an objective daily valuation process and recognizing the impact of material events. This guide also highlights currently accepted methods for daily valuation.
This “Checklist” is designed to assist Plan Sponsors and Plan Advisors/Consultants within the DC marketplace who are evaluating direct real estate funds for use in their DC Plans, as part of a multi-asset risk/age-based fund or in some cases as a stand-alone option.
