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Pension funds eye international markets.

American pension plans, which have increased their general international investments over the past five years, are strategically planning for international real estate investments over the near term, according to a new survey of international real estate strategies.

The study was co-authored by Ferguson Partners Ltd., and Continental Bank, Chicago.

The study said American funds are focusing on international securities because they believe the economic growth rates in foreign countries are greater than the United States.

International real estate investment over the next several years will follow the major investments already made in equities and fixed income, it continued.

The report cited industry sources on the increase in overseas investments by American funds to $45 billion from approximately $8 billion in 1984.

In addition, American pension funds have increased their real estate equity investments. The top funds currently have $50 billion invested in real estate equities compared with $15 billion in 1984.

American funds have approximately 10 to 15 years experience investing in real estate equities and most are now reaching a level of experience and maturity that enables them to consider global real estate investments, the study said.

The major thrust for overseas investments in real estate is expected to come from the large public and corporate funds which have advanced real estate programs. Many of these large funds have internal real estate professionals who manage and monitor the activities of real estate advisory firms serving the organizations.

However, real estate currently represents only a small portion of the total investment portfolios of American funds and only half as much as the real estate investment maintained by their European counterparts.
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Publication:Real Estate Weekly
Article Type:Brief Article
Date:Jan 15, 1992
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