EL SEGUNDO, CA—This week, Griffin Capital Corp. announced a milestone for its Griffin Institutional Access Real Estate Fund. Geared toward individual investors, the fund has surpassed $1 billion in assets under management in a little over two years, an uncommon level of performance for funds of its type.
“We wanted to provide institutional access to real estate investment for individuals, but individuals can't buy the NCREIF ODCE funds, for example, on their own,” Randy Anderson, portfolio manager for GIREX, tells GlobeSt.com, referring to the 33 commingled funds in the National Council of Real Estate Investment Fiduciaries' Open End Diversified Core Equity index. “They need a vehicle to access that.”
Launched on June 30, 2014, GIREX strategically invests in an actively managed blend of private institutional real estate investment funds as well as a diversified set of publicly traded real estate securities. The combination has been proven to provide both durable current income and capital appreciation, with moderate volatility and low correlation to the broader market, says Griffin Capital.
GIREX is structured as an interval fund under the Investment Company Act of 1940. The basic structure may date from the presidency of Franklin D. Roosevelt, but “it's just now coming back into use with certain real estate and alternative type investments,” Anderson says. “It's governed by the '40 Act, so it provides a lot of transparency to the marketplace in terms of reporting. It also provides a lot of transparency, so that everybody is able to watch the performance of a particular investment on a daily basis.”
Among the more appealing aspects of an interval fund, Anderson says, is that “while an investor can take in money every day, and you invest in assets every day, you don't provide liquidity every day. You provide it at the interval, hence the term 'interval fund.' It looks and feels a lot like an open-end mutual fund, but technically it's a closed-end interval fund, because the liquidity occurs once a quarter. That provides a lot more flexibility for the portfolio manager.
“If I had to provide daily liquidity, I would be invested almost exclusively in publicly traded securities, but this allows me to buy both public and private securities,” he adds. “You can have a higher income yield, you can have lower volatility to the market, lower beta to the market—those are the types of portfolio characteristics that people so often like in their alternative investments.”
Griffin Capital also sponsors non-traded REITs, and Anderson sees room for both in the individual investor's portfolio. “You get a lot of the attractive features that people have grown to enjoy in the non-traded REIT space, but you also have the opportunity to invest in securities that you couldn't invest in before,” he says. “You have access to these big private REITs that are part of the NCREIF ODCE universe, and you get a broader, more diversified portfolio right out of the gate.”
Kevin Shields, the firm's chairman and CEO, says GIREX's “strong growth” in AUM will enable it “to take advantage of increasing efficiencies and economies of scale that ultimately benefit the Fund's investors. This will likely continue to make Griffin Institutional Access Real Estate Fund a leader in the alternative investment space.”
More than 300 of the industry's leading national investors, REITs, banks, private equity firms, asset management firms and other institutions will join us as we explore the market conditions behind the trends at this year's RealShare National Investment & Finance, scheduled for Oct. 5 and 6 at the Roosevelt Hotel in New York City. Learn more.
EL SEGUNDO, CA—This week, Griffin Capital Corp. announced a milestone for its Griffin Institutional Access Real Estate Fund. Geared toward individual investors, the fund has surpassed $1 billion in assets under management in a little over two years, an uncommon level of performance for funds of its type.
“We wanted to provide institutional access to real estate investment for individuals, but individuals can't buy the NCREIF ODCE funds, for example, on their own,” Randy Anderson, portfolio manager for GIREX, tells GlobeSt.com, referring to the 33 commingled funds in the National Council of Real Estate Investment Fiduciaries' Open End Diversified Core Equity index. “They need a vehicle to access that.”
Launched on June 30, 2014, GIREX strategically invests in an actively managed blend of private institutional real estate investment funds as well as a diversified set of publicly traded real estate securities. The combination has been proven to provide both durable current income and capital appreciation, with moderate volatility and low correlation to the broader market, says Griffin Capital.
GIREX is structured as an interval fund under the Investment Company Act of 1940. The basic structure may date from the presidency of Franklin D. Roosevelt, but “it's just now coming back into use with certain real estate and alternative type investments,” Anderson says. “It's governed by the '40 Act, so it provides a lot of transparency to the marketplace in terms of reporting. It also provides a lot of transparency, so that everybody is able to watch the performance of a particular investment on a daily basis.”
Among the more appealing aspects of an interval fund, Anderson says, is that “while an investor can take in money every day, and you invest in assets every day, you don't provide liquidity every day. You provide it at the interval, hence the term 'interval fund.' It looks and feels a lot like an open-end mutual fund, but technically it's a closed-end interval fund, because the liquidity occurs once a quarter. That provides a lot more flexibility for the portfolio manager.
“If I had to provide daily liquidity, I would be invested almost exclusively in publicly traded securities, but this allows me to buy both public and private securities,” he adds. “You can have a higher income yield, you can have lower volatility to the market, lower beta to the market—those are the types of portfolio characteristics that people so often like in their alternative investments.”
Griffin Capital also sponsors non-traded REITs, and Anderson sees room for both in the individual investor's portfolio. “You get a lot of the attractive features that people have grown to enjoy in the non-traded REIT space, but you also have the opportunity to invest in securities that you couldn't invest in before,” he says. “You have access to these big private REITs that are part of the NCREIF ODCE universe, and you get a broader, more diversified portfolio right out of the gate.”
Kevin Shields, the firm's chairman and CEO, says GIREX's “strong growth” in AUM will enable it “to take advantage of increasing efficiencies and economies of scale that ultimately benefit the Fund's investors. This will likely continue to make Griffin Institutional Access Real Estate Fund a leader in the alternative investment space.”
More than 300 of the industry's leading national investors, REITs, banks, private equity firms, asset management firms and other institutions will join us as we explore the market conditions behind the trends at this year's RealShare National Investment & Finance, scheduled for Oct. 5 and 6 at the Roosevelt Hotel in
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