Case Detail

Case Summary

Cause and Effect: Performance Attribution in Commercial Real Estate

Case Number: 5-315-308, Year Published: 2017, Revision Date: June 09, 2017

HBS Number: KEL996

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Authors: Craig Furfine

Key Concepts

Cash Flow Analysis, Financial Analysis, Financial Strategy, Performance Management, Performance Measurement, Private Equity, Real Estate


In April 2015, Shannon Enberg, Managing Director of Real Assets at the United Kingdom Telecom and Technology Pension Scheme (UKTTPS), received a startling memo from the fund's board of directors. In a nutshell, the board sought to reduce the fund's multimillion-pound annual expenditure on management fees by asking all managing directors to drastically cut the number of private managers being used to manage UKTTPS assets. Enberg was told to cut the number of her external managers in half, but given the illiquidity of her private equity investments in commercial property, she would be allowed to make the decision to rehire each manager (or not) as each of her investments matured. UKTTPS had two investments in closed-end property funds that had just liquidated their final holdings at the end of 2014. Both managers had new funds being raised that could recycle the investment proceeds, but now that she was being forced to cut back, Enberg wondered whether either was really worth rehiring.

Learning Objectives

After students have analyzed the case they will be able to conduct a performance attribution exercise to determine the empirical sources of an external fund manager's successes and failures, and understand the necessity of a qualitative component in a complete evaluation of performance of external managers in a commercial real estate context.

Number of Pages: 22

Extended Case Information

Teaching Areas: Finance

Teaching Note Available: Yes

Geographic: United Kingdom

Industry: Commercial Real Estate

Organization Name: United Kingdom Telecom and Technology Pension Scheme

Organization Department: Real Assets

Organization Size: Medium

Decision Maker Position: Managing Director

Decision Maker Gender: Female

Year of Case: 2015