Big Money Bullish on Real Estate
Many pension funds may be feeling pain in a low yield world, but one fund is turning the tables.
Steve LeBlanc senior managing director for the teacher retirement system of Texas tells us that his fund is outperforming the S&P, largely by partnering with private equity.
“We share our best ideas and they share their best ideas,” he says.
Although the specifics are somewhat complex, the core idea is relatively simple. “We can lock up capital for a longer-term,” explains LeBlanc. In fact, when LeBlanc partners with private equity, a typical investment will have a time horizon of 5-7 years.
“And when we invest alongside (private equity) it can add 20-30% return,” says LeBlanc.
Of course this kind of strategy demands rolling up your sleeves and getting into the thick of the things. And after sifting through research and crunching numbers a theme may be emerging from some of LeBlanc’s research – real estate.
LeBlanc tells us, “We will make money in real estate!" And he's looking at all kinds of real estate - multi-family, office and single family properties.
Although we've heard the thesis before, it's all the more noteworthy because LeBlanc invests alongside some heavy hitters such as KKR and Apollo. Although he didn’t come out and say it directly, it sounds like if you have a long-term time horizon, the housing market may be worth a look.
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Trader disclosure: On March 5, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Finerman is long (AAPL); Finerman is long (BAC); Finerman is long (JPM); Finerman is long (HPQ); Finerman is short (SPY); Finerman is short (IWM); Finerman is short (MDY); Kelly is long (QQQ) calls; Kelly is long (USG); Kelly is long (SPY); Kelly is long (SPY) Puts; Kelly is long (EWE); Kelly is long Mexican Peso; Kelly is long German Bunds; Kelly is short (EWY); Kelly is short Australian Dollar; Kelly is short New Zealand Dollar; Adami is long Citigroup; Adami is long (GS); Adami is long (INTC); Adami is long (AGU); Adami is long (MSFT); Adami is long (NUE); Adami is long (BTU); Nations is long (BAC); Nations is long (SPY)
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