In talking to (or working at) LPs, what is your guys' sense of where real estate allocations are going? Are there differences that one can generalize about between pensions, endowments, family offices, SWFs, etc.? It seemed a few years ago that the trend was to move RE (or some kind of "real asset" bucket that includes infrastructure, timber, etc.) above 10% into the 12-15% range (canadian pensions and others went even higher), but I've lately seen more investors retreating or remaining in the 7-9% range. Hedge Funds have taken a hit at tons of places and illiquid asset classes have moved higher in the pecking order, but hard to discern clear trends beyond that. I think a lot of people "wanted" to go higher but then the US market became expense and they backed away... thoughts?
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Many small and medium plans out there are still underweight real estate significantly. However, I have heard consultants are pushing for infrastructure lately (they group real estate and infrastructure under real assets category). We have seen some small redemption and re-balancing in our open-ended funds. I think if the return is in the single digit this year and next year, things will slow down a lot.
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