At Duff & Phelps, we have been managing institutional REIT portfolios since 1995, applying a rigorous fundamental research discipline that is our hallmark. We focus on listed securities as opposed to private real estate, which provides the liquidity and transparency of the public equity markets and, over the last full real estate cycle, provided a performance premium, on average, compared with private real estate funds. Our investment philosophy is based on the belief that owning high-quality listed owners and operators with a “rental” business model will produce superior risk-adjusted returns. Focusing on this investment profile, we believe, should result in a portfolio that offers stable cash flows with the potential to increase them over time. In addition, having an allocation to listed REITs may help dampen volatility in an investor’s overall portfolio, as listed REITs’ low correlation with other asset classes over the long-term aids in portfolio diversification. We conduct intensive fundamental research, spending considerable time analyzing managements’ capabilities and the quality of firm assets in order to identify candidates we determine are the most attractive in the listed REIT universe. In-depth cash flow modeling based on detailed ten year projections allows us to make reasoned judgements and invest in those securities we believe have the best chance of producing attractive risk-adjusted returns. We believe real estate is a long-term investment and consequently our thesis may need time to be realized over the normal course of the real estate value creation cycle. In addition, since we focus on listed securities, we may also need to be patient in allowing the market to ascribe a “fair” value to a holding. Both of these considerations have led to relatively low turnover in the portfolio. We apply these disciplines to all three of our institutional REIT and listed real estate strategies: U.S., Global and International.
Source: NAREIT, REITs: Real Estate With a Return Premium, 2015. Based on U.S. stock exchange-listed equity REITs, as measured by the FTSE NAREIT Equity REITs Index, and data from NCREIF and the Townsend Group measuring the performance of private equity real estate funds available to U.S. institutional investors over the last full real estate cycle (from the third quarter of 1990 through the second quarter of 2008).
Our strategies are designed to deliver on their goals. We designed our investment strategies to meet the needs of different investors. As one of the investment managers within the Virtus Investment Partners network, our strategies are offered to indviduals in the retail market via open-end mutual funds. For many investors, mutual funds offer a great balance between professional money management and ease of use.
For information regarding open end mutual funds utilizing Duff & Phelps strategies, please visit the Virtus Website.
This information does not represent an offer, or the solicitation of an offer, to buy or sell securities of the Funds.