DES MOINES, Iowa--(BUSINESS WIRE)--As the shift from static products to client-driven solutions continues, Principal Real Estate Investors is pleased to announce the creation of Retirement REdirect, a comprehensive, customizable commercial real estate strategy for defined contribution (DC) and defined benefit (DB) plans.
“We’ve witnessed the discussion change from purchasing specific properties or securities to building a comprehensive allocation to commercial real estate investment alternatives,” said Pat Halter, chief executive officer of Principal Real Estate Investors. “We believe both DC and DB plans can benefit from a dynamic allocation to the four quadrants of commercial real estate – public equity, private equity, public debt and private debt.”
The Retirement REdirect program offers DC and DB plans the following:
- Access to an institutional, fully integrated commercial real estate management platform with expertise in each of the four quadrants
- Benefits of direct real estate investment through the Principal U.S. Property Separate Account1
- Potential to increase portfolio return per unit of risk, with the funds’ strategies meeting client needs of current income as a significant component of total return, diversification and inflation protection
According to a new report from CREATE-Research commissioned by Principal Global Investors, the demand for real assets, namely commercial real estate, will continue to grow as DC and DB plans seek further diversification, protection from inflation and stronger risk-adjusted returns. Notably, rising interest in real assets was the most significant change in this year’s findings compared to those gathered in 2012.
“Target-date and other asset-allocation funds in the DC space are great candidates for diversified exposure to commercial real estate, as the majority of these types of funds rely on real estate investment trusts (REITs) as their sole real estate allocation,” Halter said. “A broader set of commercial real estate alternatives could help increase diversification, manage volatility and provide alpha to investors.”
For more information about Principal Real Estate Investors’ Retirement REdirect strategy, download the white paper.
About Principal Real Estate Investors
Principal Real Estate Investors manages or subadvises $47.7 billion in commercial real estate assets. The firm’s real estate capabilities include both public and private equity and debt investment alternatives. Principal Real Estate Investors is the dedicated real estate group of Principal Global Investors, a diversified asset management organization and a member of the Principal Financial Group®.
About Principal Global Investors
Principal Global Investors is a diversified asset management organization and a member of the Principal Financial Group®, with expertise in equities, fixed income and real estate investments, as well as specialized overlay and advisory services. Principal Global Investors manages $289.1 billion in assets2 primarily for retirement plans and other institutional clients3.
About the Principal Financial Group
The Principal Financial Group® (The Principal®)4 is a global investment management leader offering retirement services, insurance solutions and asset management. The Principal offers businesses, individuals and institutional clients a wide range of financial products and services, including retirement, asset management and insurance through its diverse family of financial services companies. Founded in 1879 and a member of the FORTUNE 500®, the Principal Financial Group has $450.6 billion in assets under management5 and serves some 19.8 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.
1 The Principal U.S. Property Separate Account (the “Principal U.S. Property Account” or “the Account”) is an open-end, commingled real estate account available to retirement plans meeting the requirements for qualification under Section 401(a) of the Internal Revenue Code of 1986 (“Code”), as amended, and governmental plans meeting the requirements of Section 457 of the Code, as amended, since 1982. The Account is an insurance company separate account sponsored by Principal Life Insurance Company and managed by Principal Real Estate Investors.
2 As of June 30, 2013.
3 Principal Global Investors is the asset management arm of the Principal Financial Group ® (The Principal ®) and includes the asset management operations of the following subsidiaries of The Principal: Principal Global Investors, LLC; Principal Real Estate Investors, LLC; Principal Enterprise Capital, LLC; Liongate Capital Management LLP; Spectrum Asset Management, Inc.; Post Advisory Group, LLC; Columbus Circle Investors; Edge Asset Management, Inc.; Morley Financial Services Inc.; Finisterre Capital, LLP; Origin Asset Management, LLP; Principal Global Investors (Europe) Limited; Principal Global Investors (Singapore) Ltd.; Principal Global Investors (Australia) Ltd.; Principal Global Investors (Japan) Ltd.; Principal Global Investors (Hong Kong) Ltd.; CIMB-Principal Islamic Asset Management Sdn. Bhd.; and the majority owned affiliates of Principal International, Inc. Assets under management includes assets managed by investment professionals of Principal Global Investors under dual employee arrangements with other subsidiaries of The Principal and assets managed in accordance with investment advice provided by Principal Global Investors through the delivery of a model.
4 “The Principal Financial Group” and “The Principal” are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.
5 As of June 30, 2013.