In collaboration with the DC Real Estate Council, NCREIF and PREA, NAREIM™ (the National Association of Real Estate Investment Managers™) provides an in-depth view of Defined Contribution (DC) capital raising and organizational metrics by real estate investment managers.
The annual DC Survey benchmarks:
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Net capital flows of DC capital into private real estate strategies
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Amount of capital contributions from existing and new investor mandates
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Inflows, outflows by vehicle type
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Target allocations and liquidity sleeve targets
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Resourcing and staffing to support private real estate DC products
For more information on participating in the DC Survey, contact IvyLee Rosario, Head of Programs.
2024 DC SURVEY
The 2024 Defined Contribution Survey results have been released showing a modest decline in defined contribution capital flows to real estate funds.
However, despite net capital flows declining by $700m in 2023, two-thirds of real estate investment managers reported experiencing net increases in flows from DC investors. Just one-third of firms drove the overall net decline in capital flows in 2023.
NAREIM™ (the National Association of Real Estate Investment Managers™) has partnered with the DC Real Estate Council, NCREIF and PREA to produce the 2024 DC Survey, which focuses on inflows and redemptions of DC commitments into dedicated private real estate vehicles as well as open-ended/ODCE funds and retail vehicles targeted private real estate strategies.
More than $36bn of DC capital was invested into real estate strategies through the end of 2023, according to the 2024 edition of the DC Survey. To download the report, click here.
2024 DC SURVEY RESULTS
$36bn OF DC $ IN PRIVATE RE
Approximately $36 billion of defined contribution capital is currently invested in private real estate, according to the 2024 results of the Defined Contribution (DC) Survey.
The 2024 DC Survey was produced by DCREC, NAREIM, NCREIF and PREA and covers DC real estate capital raising, structuring, liquidity and organizational design. Released October 2, 2024, the Survey reveals that net capital flows declined modestly in 2023, by $700m, with $3.1bn of inflows and $3.8bn of outflows in the 12 months to the end of December 2023.
Key highlights also include:
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Dedicated real estate funds have 85% of assets in private real estate, with 12% in listed REITs
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The average liquidity cap is 9.25%, with two-thirds of managers rebalancing quarterly
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Around 64% of managers target the DC channel using in-house real estate capital raisers
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For firms with dedicated DC staff, 36% of their time is spent on marketing, sales and distribution while almost one-quarter is spent, respectively, on portfolio management/product development and client relations
investor interview: New mexico PERA & Meketa
The private real estate roadmap four years in the making
An interview with:
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Karyn Lujan, Public Employees Retirement Association of New Mexico (PERA)
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Paul Cowie, Meketa Investment Group
The introduction of core real estate into a defined contribution plan offers the benefits of diversification, stable income returns, stronger risk-adjusted returns, and the potential for inflation protection with the benefits of reducing volatility in the portfolio. But what happens in an extreme market? How do illiquid assets work in reality?
Karyn Lujan of Public Employees Retirement Association of New Mexico and consultant Paul Cowie of Meketa Investment Group speak with NAREIM and DCREC about how the public pension’s voluntary deferred compensation plan introduced core private real estate into their target date funds and the lessons learned during the Covid-19 pandemic when rebalancing was top of mind.
Their key lessons learned? Understand the legal reviews required, be proactive in rebalancing and embrace the fiduciary oversight you provide participants.
Click here to download the New Mexico/Meketa interview.
Total private real estate DC capital over past five years
Net capital flows from Defined Contribution investors declined modestly in 2023, by $700m.
“We are starting to see renewed interest on the part of DC plans investing in the real estate market,” said Greg Jenkins, co-president of DCREC and head of institutional defined contribution at Invesco. “Sentiment is trending positively as interest rates begin to fall and we move further away from the pandemic.”
Diane Smola, co-president of DCREC and managing director at Principal Real Estate Investors added: “A real estate allocation within a multi-asset portfolio has the potential to provide enhanced diversification and consistent income over time."