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Tim Riddiough

2015-16 AREIT Fund Performance

by Tim Riddiough Monday, June 13, 2016

This year’s AREIT team of Zi Sen Chong, Jonathan Davis, and Jeffrey Grabowski began the year by articulating the strategy of their “Isthmus Fund” as being overweight on REITs specializing in multifamily housing and underweight on hospitality-focuses REITs, with a neutral weight on other sectors. Throughout the year, they invested using a generally negative economic outlook, anticipating the continued slowdown of global economic growth. Overall, they found that their office and retail investments did better than expected but the multifamily sector under-performed. By the end of the year, the team had achieved just over a 7.50% total return over a seven-month investment period which essentially broke even with their bench mark. The endowment balance of the fund is now almost $1.7 million after the payment of all associated expenses.

AREIT2015-16Our all-star AREIT Board of Advisors supported the students throughout the year with their vast knowledge of the companies and property type sectors in the portfolio. They reacted very well to the team’s final presentation, giving strong positive feedback about the performance and structure of the Isthmus Fund portfolio. The presentation was seen as “very crisp” and it was universally agreed upon that the team had worked exceptionally well together. The Board also commented that 2016 Q1 was “one of the most challenging quarters in history” for active management teams, and applauded the student team for their strong performance in spite of market conditions.

As always, we are incredibly grateful to the AREIT Advisory Board: Joe Betlej, Steven Buller, Michael Casey, Lee Christensen, Adam Cibik, Randy Eggert, Stephanie Krewson-Kelly, Reginald Pfeifer, Tim Pire, Seth Singerman, Ken Statz, Bob Thomas, and David Toti. Their generous donation of time and professional leadership helps make AREIT a singular educational experience for our students. I know for a fact that the AREIT student team benefitted immensely from their interactions with board members throughout the year (as did Mike and myself). We would also like to welcome a new AREIT board member Brandon Goetzman, CFA, Senior Vice President at Blue Vista Capital Management, who joined the board in May.

Finally, we owe many thanks to Michael Brennan, Irgens Executive Director of the Graaskamp Center, who co-taught the course with me again this year. His thoughtful appraisals of company pitches made by the students, the time spent with the team in preparation for the board meetings, and his mentoring of the students has truly elevated the quality of the program. This year, we were also very grateful to have the support and guidance of Graaskamp board member Tim Pire. Tim recently retired from his position as Managing Director at Heitman Financial, and we are very fortunate to have him joining us again next year in an advisory role.

Finally, I would like to introduce and welcome the six members of our 2016 AREIT team (the largest group to date): Simon Bowler, Zikril Hakim, Daniel Hanson, Brian Hughes-Cromwick, Paul Laughlin, and Nataliya Vladimirova. Mike Brennan, Tim Pire and I are looking forward to working with them in the coming year.