As investors’ appetite for real assets grows, so does the level of sophistication they require in portfolio construction. Yet the tools at their disposal for allocating to different parts of the real asset universe remain less developed than those available in public markets.
In particular, the risk assessment of different investment strategies remains all too often qualitative, using broad terms such as “core”, “core plus” or “value add”. Many sectors, particularly private infrastructure, do not have the long, transparent and tradable pricing history needed to measure risk and return at a statistical level.
With real assets being an increasing focus for investors and regulators, new data and benchmarks have emerged over the past five years – we expect the drive for greater transparency to continue. However, the availability of quantitative and comparable data across the real asset universe remains inadequate.