MSCI Launches First Ever Global Private Real Estate Risk Model
New Barra Model Incorporates IPD Global Data Set
LONDON -- December 12, 2013
MSCI Inc. (NYSE:MSCI), a leading provider of investment decision support tools
worldwide, today announced the launch of the new Barra Private Real Estate
Model (PRE2), the industry’s first global private real estate multi-factor
“Until now it has not been possible to measure and compare the risks of global
real estate with other asset classes,” said Roveen Bhansali, Managing Director
and Head of Risk Management Analytics for MSCI. “This new private real estate
model represents a major step forward by expanding coverage to 31 countries
and putting it in a global, multi-asset class context.”
The Barra PRE2 model incorporates global private real estate data from IPD, a
leading provider of real estate performance and risk analysis, acquired by
MSCI just over a year ago. PRE2 provides clients with the most extensive
coverage of private real estate risk available in the market to date. It also
provides a consistent methodology for modeling global private real estate and
seamless integration with MSCI’s premier multi-asset class fundamental factor
model, the Barra Integrated Model (BIM), which includes both public and
private real estate.
The IPD dataset also allows managers to overcome the challenge of using public
equity to represent private real estate. It shows that public equity markets
and private real estate are not always correlated. For example, the
relationships between New York real estate and financial stocks, Houston real
estate and energy stocks or San Francisco real estate and technology stocks
all have very low statistical significance.
Peter Hobbs, Managing Director of Research for IPD, added, “This development
provides fund managers unprecedented insight into global real estate risks.
The new Barra PRE2 model reflects the changes in private real estate risk
forecasts in a more timely fashion than traditional methods.”
MSCI Inc. is a leading provider of investment decision support tools to
investors globally, including asset managers, banks, hedge funds and pension
funds. MSCI products and services include indices, portfolio risk and
performance analytics, and governance tools.
The company’s flagship product offerings are: the MSCI indices with
approximately USD 7.5 trillion estimated to be benchmarked to them on a
worldwide basis^1; Barra multi-asset class factor models, portfolio risk and
performance analytics; RiskMetrics multi-asset class market and credit risk
analytics; IPD real estate information, indices and analytics; MSCI ESG
(environmental, social and governance) Research screening, analysis and
ratings; ISS corporate governance research, data and outsourced proxy voting
and reporting services; and FEA valuation models and risk management software
for the energy and commodities markets. MSCI is headquartered in New York,
with research and commercial offices around the world.
^1As of March 31, 2013, as reported on July 31, 2013 by eVestment, Lipper and
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