MN’s real estate programme is part of its return portfolio, alongside risky asset classes like equities and private equity. MN’s real estate strategies are therefore aligned with a risk-averse approach to effectively leverage their full diversification potential when compared to the other asset classes.

MN’s indirect strategy was initiated largely in Europe in 2016 and expanded to the US at the end of 2021. It largely consists of non-listed assets to further diversify its clients’ portfolios. The strategy is designed to be long-term and risk-averse, with a strong local presence among its strategic partners. The result is a selection of core open-ended funds. If a suitable fund could not be found, MN worked with its managers to create one. Apart from conforming to MN’s investment strategy, the funds also need commit to a high level of ESG standards.

MN’s strategy is geared towards core holdings with a corresponding risk and return profile, while maintaining a strong focus on income producing real estate, with low leverage and long-term indexed rental contracts. This aims to create a natural hedge against inflation.

MN has also introduced a tiering framework which assesses all assets based on geography, sector, development exposure and leverage percentage. For each factor, the risk level is categorised as low, medium or high risk. Since the introduction of the framework, MN has chosen or initiated open-end funds that align with the tiering requirements.

To further enhance the incorporation of ESG factors, MN conducted ESG sessions with all external managers to align their strategies with client objectives. This has resulted in the portfolio averaging 4 GRESB stars, with energy and GHG data coverage approaching 90%. MN has negotiated lower fees by leveraging its clients’ combined stakes and acting as a cornerstone investor for funds that were co-created to meet the specific needs of clients.