Mercer (Real Estate)

Mercer is a global investment partner to institutional investors worldwide to help them reach their investment goals, drive better outcomes and manage risk across portfolios – through research, advice and solutions. We aim to bring innovation and agility to alternative investment portfolios around the world. At Mercer, investment advice is in our DNA. For over 50 years, we have transcended individual perspectives to develop a deeper, more comprehensive understanding of the global investment universe.

When we build portfolios in alternatives, investors can trust that our team has prioritised their objectives, carefully considered the opportunities available, and focused on what matters most to investors seeking a partner in alternatives. Mercer has $548bn in assets under management¹, working with over 3,300 clients² globally. Our global alternatives platform comprises 260 investment professionals based in 32 offices³ around the world, advising on $181bn in assets and with $40bn in assets under management.⁴

_{1 Mercer, as of 30 September 2024.
2 Mercer, as of 31 March 2024.
3 Mercer, as of 31 March 2024.
4 Mercer, as of 31 December 2023. Private markets assets based on net asset value (NAV) plus unfunded commitments. Hedge funds and other alternative assets based on NAV.}

Investment principles & strategy

We employ a thematic, bottom-up investment strategy that aims to align global macroeconomic trends with high-conviction private real estate investments. We start by identifying broad economic and social themes – including demographic shifts, urbanisation, technological changes and the growth of e-commerce – before mapping these trends to the specific real estate managers, strategies and underlying assets with the aim of capturing outsized returns based on these investment ideas.

We then leverage Mercer’s global network of over 400 highly rated⁵ real estate managers, covering more than 3,000⁶ strategies. This allows us to access a vast pool of exclusive and sought-after investment opportunities⁷. With the flexibility to invest across various sectors and regions, we can adapt the portfolio to changing market conditions.

The final phase involves a detailed, forensic analysis of individual assets, where each property is scrutinised to ensure it aligns with the fund’s risk-return objectives, as well as evaluating the best way to access each investment. We believe that active asset management is essential for both value creation and effective risk management. At Mercer, we align with managers who are committed to actively futureproofing assets to enhance long-term value. Our broad network of other limited partners (LPs) uniquely positions us to lead on influencing optimal outcomes.

_{5 Pursuant to Mercer’s proprietary rating process, the rating assigned to a strategy may or may not be consistent with its past performance. Although the rating reflects our expectations of future performance over a time frame appropriate for the particular strategy, we do not guarantee that these expectations will be fulfilled. Please see the Guide to Mercer’s Investment Strategy Ratings: https://www.mercer.com/assets/us/en_us/shared-assets/local/attachments/pdf-wealth-guide-to-mercers-investment-strategy-research-ratings-mercer- 2023.pdf
6 Mercer, as of 31 March 2024.
7 Access to managers and investment opportunities is not guaranteed.}

Strategic corporate development

Mercer Investments’ business strategy has evolved over time based on industry trends and the company’s focus on client needs. We are building on our success as one of the leaders in investments across research, advice, and solutions. Being part of a more connected Mercer business means we have even more opportunities to make a greater client impact. This intra-group collaboration allows us to accelerate profitable growth by taking our market-leading investment services and solutions to a broader range of prospective clients. Through the continued growth of our business, we can enrich our existing capabilities and support the career paths of our talented colleagues.

Performance verification

We evaluate performance using various benchmarks, including peer comparisons and public market equivalents (PME). Peer comparisons assess investments against similar opportunities and periods, while PME benchmarks performance by simulating cash flows in public market indices. This approach helps us understand portfolio and underlying performance relative to peers and economic conditions.

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