Our Investment Strategy
Ranger Global Real Estate Advisors (“RGREA”) is focused exclusively on the active management of portfolios comprised of listed global real estate, including Real Estate Investment Trusts (REITs) and Real Estate Operating Companies (REOCs). Globally, liquid real estate markets are in varying stages of maturity and are growing in overall size and breadth, particularly outside of the U.S., providing continued and expanding opportunity for active investors. In the modern REIT era (23 years ended 12/2015), liquid global real estate (as represented by the FTSE EPRA/NAREIT Developed Index) has outperformed both global equities (MSCI World Index) and global fixed income (Barclays Capital Composite Global Bond Index). Further, returns on liquid global real estate are highly correlated to those of direct real estate while providing the added benefits of greater diversification, enhanced liquidity, lower volatility, and lower cost of ownership. Liquid global real estate provides for an excellent complement to a direct real estate investment portfolio.
Led by Chief Investment Officer Andrew J. Duffy, CFA, a 25-year investor in liquid real estate, RGREA’s investment team has been selected for its deep domain expertise, with a collective 82 years of experience investing in global real estate markets. The firm’s entrepreneurial culture of ownership enables us to attract some of the finest real estate specialists our industry has to offer. The team is organized into U.S. and International sub-teams, each comprised of a veteran Portfolio Manager and an Investment Analyst, working together with a Senior Trader, all reporting directly to Mr. Duffy. Critical to our success and a key differentiator of our investment team is a deep understanding of both the markets and the management teams we invest in, garnered since the inception of the asset class and across multiple market cycles. Further, the team’s size and single New York City location afford real-time collaboration at all levels, instant communication, and nimble decision-making across markets, which directly translates to a competitive advantage for our investment team and better results for our investors.
RGREA utilizes a two-stage stock selection process to combine a proprietary quantitative screening model with rigorous qualitative analysis. We focus from the bottom up on owning companies with superior management teams, attractive supply and demand metrics, strong fundamentals, and sustainable competitive advantages. This approach has resulted in the generation of significant alpha versus the benchmark index for our investors while providing higher active share and below-average volatility. Portfolios can be +/- 50% of the benchmark index’s weight by region and property type, with the exception of specialty REITs, which are a key differentiator and performance driver within our strategy, and can be up to 3x the benchmark’s weight.
RGREA’s global real estate portfolios are targeted to outperform in all periods when high-quality companies enjoying strong fundamentals (e.g., supply-demand dis- equilibrium) are rewarded and exogenous factors or market stress do not overtake fundamentals over the short-term. While our investment style may be categorized as ‘defensive’, our portfolios have outperformed in both up and down markets, including the current 7-year bull market for real estate securities which has favored more risk- oriented investment strategies. With a focus on both quality and specialty REITs, we are well-positioned to generate consistent performance should the current bull market end, while still limiting downside risk for our clients. In addition, we believe that our investment process enhances investors’ total return by utilizing an income-generating overlay designed for both up and down markets, which is ancillary to our core investment strategy (implemented on core portfolio holdings) and highly differentiated from our peers.