Advantages & Disadvantages of Investing Alongside Institutional Investors

2020 was a tumultuous year for all investors, including institutional investors. But a new study reveals that 87% of institutional investors believe that 2021 will see more or similar amounts of real estate investing than in 2020. In addition, 44% of survey respondents believe that transaction volume will be significantly higher or at record highs, and many remain confident on long-term commercial real estate investment.

According to Josh Herrenkohl, a Senior Managing Director at FTI Consulting, “The survey also revealed that because institutional investors have the capital and resources to play the long-term game and weather the storm created by the pandemic, real estate will continue to be a good way to manage risk and diversify their portfolios.” This is good news for investors involved with sponsors who invest alongside institutional investors.

Key Institutional Investors are Leading the Way

There are hundreds of institutional investment firms, but the key ones in the top 100 control over $20 trillion in assets. The biggest ones are pension funds, and the larger ones in the US include Federal Retirement Thrift, California Public Employees, Mercer, California State Teachers, New York City Retirement, Florida State Board, Russel Investments, and Texas Teachers. All have diversified assets, including real estate.

Factors Influencing Investment Philosophies