Principal Financial Group 2014 Annual Report Download - page 17

CASE STUDY:
PRINCIPAL REAL ESTATE INVESTORS
At The Principal, our investment solutions expand beyond traditional avenues, empowering investors to gain
exposure to a variety of options through a balanced, diversified strategy. And we've seen consistently positive
performance, year after year.
In 2014, one such alternative investment area saw nearly $4 billion in growth of assets under management (AUM),
plus a list of top honors from respected financial authorities such as Lipper and Pensions & Investments magazine.
The investment management group that accomplished it all? The Principal Real Estate Securities boutique.
“Our strong investment performance reflects the skill of our real estate securities investment team, and our
growth in assets under management is a tribute to our global sales and distribution force," says Kelly Rush,
chief investment officer, Global Real Estate Securities at The Principal. “We’ve always been very disciplined in
following our investment process, which has allowed us to protect the interests of our clients and helps to
attract new ones.”
In 2014, that investment discipline helped to sustain strong, reliable performance. Despite widespread antici-
pation of rising interest rates at the beginning of the year, The Principal Real Estate Securities investment
team maintained its discipline in building a broadly diversified portfolio—and it paid off when interest rates
declined, surprising nearly all. By resisting the temptation to build a portfolio heavily reliant on one factor, The
Principal outperformed its benchmarks and most peers.
This consistent investment discipline is complemented by an equally consistent focus on the future in our
sales and distribution strategy, driving strong growth in assets under management for Principal Real Estate
Securities in 2014. This legacy of future focus traces back to the mid-’90s, when executives at The Principal
recognized an auspicious opportunity. Seeing a growing trend of investors using public securities to gain real
estate exposure, The Principal began developing expertise in this emerging area, branching off from an already
established and well-respected private real estate organization to develop a U.S.-focused strategy.
And our focus on the future didn’t stop there. In 2007, we launched a global strategy in anticipation of future
demand toward global srategies—and continued to recruit real estate talent even in the midst of the last
financial crisis. As of 2014, The Principal Public Real Estate Securities boutique has grown to $9.4 billion in assets
under management, thanks to a growing team with diverse expertise and a track record of proven performance.
As clients continue to show interest in more exposure to globally diverse markets, The Principal real estate
investment group is now focused on preparing to meet those developing demands as they evolve in the years
to come.
What makes us confident we'll get there? The same things that have gotten us this far: a disciplined approach, a
keen eye for opportunities that lead to future growth and an ability to navigate challenging investment markets
and deliver consistent results.
“We’re prepared,” Rush says. “We recognize that market conditions will be volatile, and we’re prepared to deal
with whatever may come our way. We’re prepared for more success.”
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