South Korea’s public pension fund National Pension Service (NPS) has awarded a US$1 billion global listed real estate mandate to Russell Investments, the global investment firm headquartered in Seattle, Washington.
Russell Investments said this is the second Global Real Estate Securities (GRES) mandate awarded by NPS to Russell Investments as part of their longstanding relationship.
”New mandate focuses on listed real estate as COVID-19 vaccine alters outlook for the asset class,” said Russell Investments in a statement.
“We’re very honored that our dynamic client NPS has extended their trust in our ability to deliver a beneficial listed real estate solution,” said Global Chief Investment Officer Pete Gunning at Russell Investments. “NPS has been actively engaged in the cutting-edge real estate asset class, even amid the COVID-19 pandemic, and we share their commitment to this increasingly important asset class.”
“We are excited to further expand our listed real estate capability to capitalize public real estate market opportunities and complement the private real estate portfolio,” said Scott Kim, Head of the Real Estate Investment Division at NPS. “Not only does this new mandate allow us to efficiently capture the potential price discrepancies between public and private real estate markets going forward but it will also act as an excellent portfolio diversifier and help improving the overall portfolio risk-adjusted return.”
Looking toward 2021, Russell Investments strategists expect public real estate will attract more cash flow due to market conditions that feature extended low interest rates, relatively high U.S. equity valuation and ample liquidity.
“Successful distribution of COVID-19 vaccines should enable demand for public real estate to recover, particularly for the most impacted property sectors, such as retail, office and lodging,” said Bruce Eidelson, Director, Senior Portfolio Manager, Equity, at Russell Investments. “We expect the ever-broadening intra-sector performance dispersion will create a better active management environment which can produce significant return over the benchmark.”