Research and publications

Benefits of Open Architecture and Multi-Management in Real Estate Markets— Evidence from French Nonlisted Investment Trusts

This publication was produced in partnership with Swiss Life Asset Managers France as part of the “Real Estate in Modern Investment Solutions” research chair ...

Author(s):

Béatrice Guedj, Lionel Martellini, Shahyar Safaee

Summary:

This publication was produced in partnership with Swiss Life Asset Managers France as part of the “Real Estate in Modern Investment Solutions” research chair at EDHEC-Risk Institute, which examines the role of real estate in welfare-improving forms of investment solutions, with a particular focus on the efficient use of dedicated real estate investments as part of the performance and hedging components of innovative retirement solutions.

This study, “Benefits of Open Architecture and Multi-Management in Real Estate Markets—Evidence from French Nonlisted Investment Trusts”, reviews the risk and return characteristics of Sociétés Civiles de Placement Immobilier (SCPIs), a form of French non-listed real estate funds, to assess whether modern investment management techniques such as fund selection and portfolio allocation can be applied to the SCPI universe and create value for an investor wishing to be exposed to French non-listed commercial real estate.

We find that the commercial SCPI market offers a significant amount of dispersion in risk and return, and portfolios of SCPIs exhibit a substantially lower level of volatility than the “average SCPI”.

We also find several attributes to have explanatory power with respect to such differences in risk and performance.

Both results suggest that value can be added by selection and allocation decisions, which could form the basis of a welfare-enhancing open architecture multi-management approach to investment in SCPIs.

Les résultats principaux de cette étude sont accessibles en français directement dans l’infographie

Avantages de la sélection et de l’allocation de portefeuille appliquées au marché des SCPI :

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Type :	EDHEC Publication
Date :	28/06/2021

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Operating from campuses in Lille, Nice, Paris, London and Singapore, EDHEC is one of the world’s top 15 business schools. Fully international and directly connected to the business world, EDHEC commands a strong reputation for research excellence and the ability to train entrepreneurs and managers capable of breaking new ground. EDHEC functions as a genuine laboratory of ideas and produces innovative solutions valued by businesses. The School’s teaching is inspired by its research work and a focus on “learning by doing”, all with the aim of equipping people with the skills to succeed in business.

About EDHEC-Risk Climate Impact Institute

Marking the priority assigned by the School to sustainability issues and building on its research programmes exploring the relationships between climate change and finance, EDHEC-Risk Institute became EDHEC-Risk Climate Impact Institute in October 2022. The Institute's mission is to help private and public decision-makers manage climate-related financial risks and make the best use of the financial tools available to transition to low-emission and climate-resilient economies. The Institute’s research programmes explore the relationships between climate change and finance and our key ambition is to become a leading academic reference point for long-term investors, helping them to manage the asset-pricing implications of climate change as well as mitigation and adaptation efforts.