Steering Model Institutional Investors

Challenges

  • Challenges for professional investors regarding the required risk-return-contribution of the asset class real estate have clearly increased
    • Target yields are not achieved
    • difficult portfolio clearance due to owner structures (indirect investments, pool funds)
    • Missing influence and control opportunities from structures and processes of fund, asset and property management
    • Potential divergence of interests (contractual agreements, financial incentive structures)
  • Indirect investments have to be repositioned
  • Existing contract structures with defined durations prevent an immediate adjustment

Project approach

  • Formulation of targets and identification of potential conflicts of interest and targets
  • Portfolio analysis and deduction of measures for portfolio clearance
  • Definition of steering parameters for remuneration-related steering (incentives), controlling of main targets (e.g. vacancy rate) and for the control of sub-targets (e.g. maintenance costs)
  • Definition incidents, planning, forecasts etc. to be reported
  • Creation of blueprint-steering concept for depiction of investor interests for complete and timely observation
  • Definition of required structure organisation (sourcing line)
  • Preparation of a concrete implementation/migration plan

Results

  • Measurement plan portfolio clearing/optimisation
  • More stringent assessment of managers (management quality) for establishing a more objective position towards the investment manager
  • Solution of goal conflicts and implementation concept for managing the manager
  • Relevant steering parameters for timely controlling (structured, condensed reporting contents)
  • System for regular measuring of investment-manager performance
  • TME offers on all relevant levels of action the relevant expertise as well as required tools to implement such a „Task-Force-Project“ successfully