New Ground

Now that self-directed “defined contribution” plans such as the popular 401(k) have assumed a dominant position in retirement investing, ING Clarion Partners L.L.C. is developing ambitious plans to serve individual retirees seeking real estate investment expertise.

By: Brad Berton, Contributing Editor 

Now that self-directed “defined contribution” plans such as the popular 401(k) have assumed a dominant position in retirement investing, ING Clarion Partners L.L.C. is developing ambitious plans to serve individual retirees seeking real estate investment expertise.

Chairman & CEO Stephen Furnary says the firm is considering a tax-exempt vehicle whose shares or units would be priced on a daily basis, rather than quarterly as is generally the case with commingled investment funds catering to traditional pension plans (“defined benefit” rather than defined contribution).

The strategy reflects the fact that retirees controlling individual plan investments have not had access to commercial real estate vehicles allowing for daily pricing, and hence have not had sufficiently timely information for making contributions and requesting redemptions.

“We perceive a significant appetite among individuals who manage contributions through their own defined-contribution plans” and accordingly demand more frequent pricing, Furnary stressed. “So we are creating a vehicle that will do just that.”

Management is also likely to structure the new vehicle so it can be tied into existing and newly formed ING Clarion commingled funds, Furnary added.

One key competitive advantage Furnary perceives for this effort: the corporate tie to the broad ING Investment Management operation, with its extensive distribution access to defined-contribution clients.

“That makes us uniquely suited to pursue opportunities in this growing market.”

For more on ING Clarion’s strategy, search for the story “Investing Smart,” and click on CPE TV for comments from Stephen Furnary