ABSTRACT
Today, many pension fund leaders are making responsible investments in the real economy in strategic industries and small and medium-size enterprises (SME), affordable and work-force housing, and economic and social infrastructure, for example. Such investments can be made as part of the alternative investment asset class that includes the sub-asset classes of real estate, private equity, and infrastructure, among others. Alternative investments provide important diversification benefits to pension investment portfolios. Due to their limited correlation with the traditional asset classes of stock, bonds, and cash, alternative investments exhibit risk–return characteristics that are different than traditional asset classes. Real estate investments can be further categorized into property development and redevelopment investments. Property development refers to the financing and construction of new real estate stock. Building trades pension funds have long invested in real estate projects, creating housing and good jobs for union members and other citizens while generating returns for the funds’ investments.
