US Real Estate Securities
A focused, high-conviction strategy that seeks attractive current income and long-term capital growth by investing in a diversified portfolio of real estate securities
- Disciplined in-depth research process that balances real estate and securities analysis to determine the optimal portfolio mix among property types
- Tactically rotates among property sectors/geographic regions based on economic and regional fundamentals
- Experienced co-portfolio managers have worked together since 2003, managing through numerous real estate and economic cycles
Key Risks
Market Risk: The risk of a change in the value of a position as a result of underlying market factors, including among other things, the overall performance of companies and the market perception of the global economy.
Liquidity Risk: The risk that the portfolio may be unable to sell an investment readily at its fair market value.
Real Estate Risk: Portfolios that invest primarily in either real estate or real estate related loans are subject to greater potential risks and volatility than a more diversified portfolio, there are particular risks associated with the direct ownership of real estate by REITs.
Counterparty Risk: The risk that the portfolio may be unable to sell an investment readily at its fair market value.
Operational Risk: The risk of direct or indirect loss resulting from inadequate or failed processes, people and systems including those relating to the safekeeping of assets or from external events.
Currency Risk: Investments in a currency other than the base currency of the portfolio are exposed to currency risk. Fluctuations in exchange rates may affect the return on investment. If the currency of the portfolio is different from your local currency, then you should be aware that due to exchange rate fluctuations the performance may increase or decrease if converted into your local currency.
Overview
Investment Philosophy
Seeks total return through investment in real estate securities, emphasizing both income and capital appreciation
- Believe companies with value-added management, operating in high-barrier-to-entry markets, economies of scale and balance sheet strength offer the most attractive upside potential
- Seek to identify companies with access to capital and staggered debt maturities
- Rotate property sectors/geographic regions based on economic / regional fundamentals
- Buy/Sell decisions based upon proprietary fundamental research with an emphasis on team-built valuation model
Investment Process Overview
Focus on experience-based, in-depth credit and industry analyses, disciplined portfolio construction and ongoing portfolio surveillance.
Equity Real Estate Securities Universe
~200 companiesProperty Sectors Available in the Public Market
Residential, Office, Retail, Health Care, Industrial, Infrastructure, Lodging, Self Storage, Data Centers, TimberMarket Cap Screen
minimum $300mnApproved List
~150 securitiesFinal Portfolio
- 35 - 45 holdings
- Active management
- Under 75% turnover
- Diversified geographically and by property type
- Maximum 5 -10% cash position
Management
Steve S. Shigekawa
Brian Jones, CFA
Related News & Insights
Rates and REITs
- (22:26) Is now the right time to return to REITs?
Returning to REITs
- As inflation declines and interest rates are cut, the future may be brightening for one of the most beaten-down U.S. equity sectors.
Real Estate Secondaries: A Diamond in the Rough Market?
- (15:45) With real estate valuations falling and liquidity needs rising, could Real Estate Secondaries be considered “a diamond in the rough” market?