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The WSIB's real estate program is an externally-managed selection of partnership investments intended to provide alternative
portfolio characteristics when compared with stock and bond investments. The majority of the WSIB's partnerships in this asset class invest in high-quality
real estate leased to third parties. The combination of steady income generated from lease payments and the potential upside from appreciation combine to
generate returns that are expected to fall between the returns for fixed income and equities.
The real estate portfolio is managed to deliver risk-adjusted returns that are consistent with the Board's long-term return expectations for the
asset class. Many of the WSIB's investment partnerships do not involve co-investment with other financial investors, thereby providing the WSIB
with governance provisions related to acquisition, liquidation, and participation in annual business plan processes.
Volatility within the real estate portfolio is minimized through a combination of factors: |
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The majority of the WSIB’s partners own real estate assets as private market investments, so they are not subject to the potential volatility of the public markets. |
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Capital is diversified among a variety of partners, each with their own investment strategy and style. |
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Partnership assets are geographically diversified, including outside the U.S. |
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Investments are made in a variety of property types to provide further diversification. |
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WSIB partners invest at different points in the real estate capital structure, as well as at different times in the property life cycle. |
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