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Cohen & Steers and IDR Partnership: A New Era in Real Estate Investment

Cohen & Steers, Inc. (NYSE: CNS) has joined forces with IDR Investment Management, LLC to unveil a groundbreaking real estate investment strategy that strategically combines both listed real estate securities and private core real estate within a singular portfolio. This innovative approach aims to tap into the potential of both markets, providing investors with a broader spectrum of opportunities while notably enhancing risk-adjusted returns.

The partnership is founded on the idea that an amalgamation of listed and private real estate can yield a more advantageous return profile compared to focusing solely on traditional core private real estate. The blending of these two sectors is particularly promising as it not only seeks to reduce risks associated with market fluctuations but also aims to lower potential drawdowns throughout real estate cycles.

Tactical Strategy: Capitalizing on Market Discrepancies

One of the key features of this new strategy is its ability to actively leverage valuation discrepancies that may arise between the listed and private real estate markets. By employing the expertise of seasoned professionals from both Cohen & Steers and IDR, the strategy is designed to make tactical adjustments — either over-weighting or under-weighting investments based on market conditions. This approach can help investors capitalize on pricing inefficiencies that sometimes exist between listed and private assets, ensuring optimized investment choices.

Jon Cheigh, the President and Chief Investment Officer at Cohen & Steers, articulated the strategic vision by stating, "There is a lead-lag dynamic in real estate investing where the performance of listed properties often precedes that of private ones, particularly during market recoveries and downturns. By fusing these market segments, we can help investors exploit the valuation mismatches and subsequently achieve greater total returns alongside enhanced liquidity."

Garrett Zdolshek, Chief Investment Officer of IDR, echoed this sentiment, pointing out the significant advantages that indexing core private real estate can offer. Zdolshek highlighted, "We firmly believe that this strategy is an innovative solution for investors looking to manage their allocations in listed and private core real estate more effectively. With Cohen & Steers' proven track record and dedication to delivering excellence, they represent the perfect collaborator on this venture."

A Multifaceted Portfolio

Cohen & Steers and IDR's partnership intends to optimize real estate allocations in a way that meets diverse investment objectives, including:

1. Enhanced Risk-Adjusted Returns: By melding actively managed listed real estate with private equity approaches, the strategy seeks to bolster total returns while maintaining comparable volatility relative to traditional real estate investments.
2. Improved Liquidity: Through index replication, investors gain greater control and flexibility regarding tactical management within their portfolios, leading to potentially improved liquidity compared to direct private investments.
3. Sector and Property Type Diversification: The strategy provides exposure to both emerging REIT sectors — such as data centers, cell towers, and healthcare facilities — and established core sectors like industrial and residential properties. This diversified approach aims to enhance portfolio construction and position investors for long-term growth potential.

About Cohen & Steers and IDR Investment Management

Cohen & Steers has been a front-runner in global investment management, focusing on real assets and alternative income strategies since its inception in 1986. Headquartered in New York, the firm has extended its reach with offices located in prominent financial hubs across the globe.

IDR Investment Management has established itself over the past 15 years as a leading firm in private equity real estate investment management for institutional investors. With its unique capability of developing the first index fund for the private equity real estate asset class, IDR manages over $8 billion in assets, providing cutting-edge solutions to its clients in Independence, Ohio.

This collaboration between Cohen & Steers and IDR Investment Management promises to reshape the landscape of real estate investment, presenting investors with a wealth of opportunities tailored to the modern market dynamics.