For some time now, pension funds and other institutional investors have been looking for new ways to hedge against inflation and generate solid, reliable income. By hiring seasoned industry professional Joyce T. Shapiro, Franklin Templeton Real Estate Advisors (FTREA) believes it has found a way to deliver on both demands.
FTREA, a unit of San Mateo, Calif.-based Franklin Resources, Inc. [BEN], brought Shapiro on to expand the group. Using a fund-of-funds approach, FTREA will bring on several asset managers with expertise in the agriculture, energy, infrastructure, timber and water sectors, also known as real assets. Those sectors traditionally have strong revenue bases, according to Jack Foster, head of real estate at Franklin Templeton.
Timber companies, for instance, can generate revenue consistently either by culling mature trees from forests annually and more frequent periods in between, Foster said. And in the infrastructure sector, highways deliver reliable cashflow from tolls.
The company expects to launch the multi-manager fund in three to six months, Foster said. For now, FTREA is relying on Shapiro to get the expanded group going. Her background suggests she is up for it.
Previously, Shapiro was at Brookfield Asset Management, a Toronto-based company that specializes in managing renewable power and infrastructure assets. There, she developed real asset private funds in timber, agriculture, infrastructure, power and real estate.
“If you ask most pension professionals how to protect from inflation, they are not sure what to do,” Foster said. “We believe real assets will offer some protection.”