Real Assets

Nordic Experts in Real Asset Investments

Real Assets represent an investment opportunity with attractive and stable returns. United Bankers have built up a capability in managing investment strategies in this area over a time span covering several decades. The UB Real Asset investment team has navigated the markets during times of distress and uncertainty as well as periods of exceptional growth. During this time, they have accumulated a wealth of experience, skills, and data – covering a broad spectrum of geographies, sectors, and individual companies around the world.

 

Examples of investment strategies that the UB Real Asset team cover globally within the asset class include listed Real Estate and Infrastructure. In addition, the team has a particular expertise within Nordic Real Estate as well as Nordic and Baltic Forestry.

 

What are real assets?

 

As a broad asset class, Real Assets are defined as investments in physical assets. These types of assets can be deemed to have an inherent physical worth, in contrast with Financial Assets, which derive their value from a contractual right and are typically intangible. Real Assets typically have performance characteristics that will enable added diversification in an investment portfolio and helps shield it against inflation risk.

 

Real Assets are often categorised into three main fields:

 

• Real Estate: Commercial and Residential Real Estate as well as REITs (Real Estate Investment Trusts).

• Infrastructure: Transportation (roads, airports, railroads), Utilities and Telecommunications Infrastructure

• Natural Resources: Agriculture, Timberland, Energy (fossil & renewable), Mining and Commodities.

 

 

 

Real Assets are appealing to investors because of their high current income as well as inflation protection. Traditional Fixed Income investments in a portfolio may, from time to time, require support from an allocation to Real Assets in order to mitigate the negative effects of a sudden surge in inflation and the consequent loss of real yield.

 

Within a long-term, strategic asset allocation framework, categories such as Real Estate and Infrastructure are well suited to represent permanent, long-term portfolio construction elements. There is ample support within academic research to suggest that e.g. Real Estate investment returns have matched or exceeded the returns of equity investments on an inflation adjusted basis.

 

An additional advantage with Real Asset investments is that their risk, as defined by the variation of returns, tends to be more moderate, compared to direct equity investments. Long-term studies have indicated that their correlation relative to other asset classes has also been relatively low. As an example, investments in Real Estate have been considered obvious in prudently managed asset portfolios over several generations. ​