As institutional institutional investors have optimized their portfolios along the risk and return continuum, real estate has become a meaningful portion of their asset mix, with the average institution allocating nearly 11 percent of its investments to the asset class.1
It is little wonder that real estate has become a portfolio mainstay. The asset class has exhibited low correlations to both stocks and bonds and demonstrated a long track record of achieving attractive risk-adjusted returns. Real estate historically has provided investors a stead source of income as well as an inflation hedge—important features in the current market environment.
Despite these benefits, high-net-worth investors have not accessed the asset class to the same degree as institutional investors. This article explores how carving out a private real estate allocation may be beneficial and provides an overview of the types of real estate investments and strategies available to investors so that they may create a private real estate allocation that is appropriate for their investment objectives, risk tolerance, and liquidity needs.
Learn more about Hamilton Lane's Real Assets Investments.
1See "Institutional Investors Increased Allocation to Real Estate This Year, Remain Under-Allocated," Commercial Real Estate Direct (December 15, 2020), http://crenews.com/2020/12/15/institutional-investors-increased-allocation-to-real-estate-this-year-remain-under-allocated/.