For nearly two decades, NEPC has been on the vanguard of identifying strategies that can help our clients meet and exceed their portfolio return requirements. Among these strategies is to invest with managers that can earn attractive returns from Real Estate, Natural Resources and other Commodity investments.
As with all other alternative assets strategies, our approach to designing a successful real estate program for our clients is driven by each investor's particular needs and investment objectives. By fully understanding a client's return requirements, liquidity needs, risk tolerances and any statutory or other constraints; we are able to develop an informed and customized real estate strategy. Our real estate consulting services cover equity and debt vehicles in both the private and public markets. We have expertise across a wide range of investment styles and all major property types, and experience in most major geographical markets. We believe that a well-designed real estate program can enhance risk-adjusted returns, decrease volatility, improve diversification, and generate additional cash flow.
Similarly, designing a timber investment program is a custom solution driven by an investor's particular needs and investment objectives. Sophisticated investors have long profited from investments in timber as an adjunct to their real estate investments. Timber is unique among natural resources because investments in timberland continually produce a commodity over time, while investments in natural resources like oil and gas are depleted over time. Timberland creates value as the forests grow, and wood is unique among commodities in the diversity of end uses, since wood is used in the construction, furniture, packaging, paper, and chemical industries. Like real estate, timber can be an income generating investment or a source of long term capital appreciation, or both, and our timber consulting services would help you consider the different opportunities.
Lastly, there is another type of investment that investors are taking a serious look at: commodities. The commodity markets are broader and more liquid than the stock and bond markets. Currencies, for example, which are considered commodities, are traded in vast quantities every day, with potentially attractive returns available to managers with expertise in this field. Other hard and soft commodities, including energy, precious metals, livestock and grains, are also traded actively and fulfill a vital role in the national and global economy. Managers investing in these commodities can potentially profit from the increasing demand for these resources across the developed and developing world, and earn a risk premium for providing liquidity to the markets. Commodity investment programs must be carefully designed, as there are opportunities to invest actively or passively, tactically or strategically, with leverage or without leverage, and NEPC helps clients explore the alternatives.
Investments in real estate, natural resources and commodities have an advantage of having very low correlation in returns when compared to traditional equity and fixed income investments. This allows for greater return diversification in addition to the possibility of higher overall returns.
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