A Clear Leader Widens the Gap in the Second Quarter Results of the Real Confidence University Portfolio Challenge
Halfway through the competition an all REIT investment strategy outperforms a diverse portfolio of real estate investment selections
NEW YORK (February 10, 2016) – Teams from 15 prominent universities across the United States received the second quarter results from the Real Confidence™ University Portfolio Challenge, a year-long competition that allows university students to gain hands-on experience in public and private commercial real estate investing.
Increasing their lead, Texas Christian University (“TCU”) achieved a return of 19.04% after two quarters; their second quarter results well outperforming their first quarter return of 8.42%. TCU’s 40% allocation to self-storage REITs posted a 16.76% return in the quarter and contributed a weighted return of 6.7% to their total portfolio. The University of Chicago followed the TCU strategy and allocated their entire portfolio (a theoretical $1 billion) to the REIT sector. It has paid off by landing them in second place, but still over a 600 basis point gap to reach first. Georgia State University, the highest ranked diverse portfolio consisting of 40% in REITs, 35% in private equity, 15% in public debt and 10% in private debt, posted a 4.73% return for the quarter.
|Rank||University||YTD Returns (after two quarters)|
|1||Texas Christian University||19.04%|
|2||University of Chicago||12.72%|
|3||University of San Diego||9.51%|
|4||Georgia State University||8.19%|
|5||Johns Hopkins University||8.19%|
The full rankings of all 15 schools and their portfolios are available here: Real Confidence University Portfolio Challenge.
“Overall returns demonstrate the current strength of the real estate industry. We’re impressed to see that all of our students’ portfolios are beating many of the broader markets over the same period of time,” said Robert K. Ruggles III, President of Altus Group’s Research, Valuation and Advisory US Division. “Through the Real Confidence University Portfolio Challenge we aim to support future industry professionals and it’s clear that these students are making great strides with this opportunity to further their knowledge of real estate investing.”
The University Portfolio Challenge Index, comprised of the total theoretical $15 billion made up of each university’s allocation, posted a 4.81% gain and outperformed nine of the 15 schools in the Challenge. REITs made up almost 55% of the Index’s portfolio, had sector returns ranging from 16.76% to -2.27%, and contributed 3.67% to the total. Private equity accounted for 33% of the portfolio and produced more consistent returns, contributing 1.00% to the portfolio total. Unlike first quarter results, REITs contributed more than private equity to the index total. The remainder of the portfolio allocations was dedicated to the public and private debt sectors, each contributing minimal gains.
Each university’s team allocated its theoretical $1 billion of capital among a variety of commercial real estate investment opportunities. The performance for each investment selection was then weighted and calculated with its respective benchmark return data provided by NAREIT®, NCREIF®, Markit® and the Giliberto-Levy Commercial Mortgage Performance Index (SM). The competition will conclude in July 2016. The winning team of the investment simulation competition will receive a $50,000 scholarship from Altus Group Limited (“Altus Group”), the National Association of Real Estate Investment Trusts (NAREIT®) and the National Council of Real Estate Investment Fiduciaries (NCREIF®).
For more information, please visit: RealConfidence.com/UniversityPortfolioChallenge
The next Real Confidence University Portfolio Challenge begins in July 2016. Faculty interested in registering, please contact Chuck DiRocco by email at firstname.lastname@example.org or signup up here.
About Altus Group Limited
Altus Group Limited is a leading provider of independent advisory services, software, and data solutions to the global commercial real estate industry. All of our five core practices – Research, Valuation and Advisory, ARGUS Software, Property Tax Consulting, Cost Consulting and Project Management, and Geomatics – embody and reflect decades of experience, a broad range of expertise and leading edge technology. Our offerings empower clients to analyze, gain insight and recognize value on their real estate investments. Headquartered in Canada, we have approximately 2,300 employees around the world, with operations in North America, Europe and Asia Pacific. Our clients include some of the world’s largest real estate industry participants, spread across a broad variety of sectors. Altus Group pays a quarterly dividend of $0.15 per share and our securities are traded on the TSX under the symbols AIF and AIF.DB.A.
For more information on Altus Group, please visit: www.altusgroup.com.
About the National Association of Real Estate Investment Trusts® (NAREIT)
NAREIT® is the worldwide representative voice for REITs and listed real estate companies with an interest in U.S. real estate and capital markets. Members are REITs and other businesses that own, operate and manage income-producing real estate, as well as those firms and individuals who advise, study and service those businesses. NAREIT® is the exclusive registered trademark of the National Association of Real Estate Investment Trusts, Inc.®
About the National Council of Real Estate Investment Fiduciaries® (NCREIF)
NCREIF® is an association of institutional real estate professionals who share a common interest in their industry. They are investment managers, plan sponsors, academicians, consultants, appraisers, CPA’s and other service providers who have a significant involvement in institutional property investments. They come together to address vital industry issues and to promote research and education. NCREIF® produces several quarterly indices that show real estate performance returns using data submitted to it by its members. Its database consists of approximately 10,000 real estate properties comprising nearly $500 billion of value. Its indices are used extensively for performance measurement and benchmarking.