Residential rental is often associated with social need. Institutional investors assess it against defined requirements for return, risk and liquidity. 

This perspective was discussed in the SAMRRA and Old Mutual Alternative Investments Multifamily Series, where Heleen Goussard, Head of Unlisted Alternative Investments at RisCura, outlined how institutional investors approach residential rental as an asset class. 

For pension funds, the question is practical. Under what conditions can residential rental be evaluated alongside other portfolio assets? Several factors determine whether residential rental can meet these institutional requirements, including its return profile, operating model, available data, investment structure and approach to impact measurement. 

How institutions define housing as an investment 

Housing includes several segments, such as affordable housing, social housing and multifamily rental. These are not treated as a single allocation. 

Institutional investors are not a homogenous group. Each fund defines impact differently and prioritises different outcomes when considering housing exposure. 

This affects how housing is positioned within a portfolio and how opportunities are assessed. 

What return characteristics are required 

Institutional investors allocate capital against clear return mandates. Impact considerations are included, but they sit alongside financial objectives rather than replacing them. 

Impact plays a role, but institutional investors are still accountable for delivering returns.  – Heleen Goussard, 09:40 

Residential rental must therefore demonstrate how it contributes to income generation and fits within a broader portfolio. 

Why the operator matters 

Residential rental performance is closely linked to operational execution, including tenant management, rental collection, vacancy management, maintenance and cost control. 

Institutional investors are not only taking exposure to the asset. They are also taking exposure to the operator responsible for managing it. 

Investors are taking risk on both the asset and the operator behind it. – Heleen Goussard, 13:55 

This places greater emphasis on due diligence around capability, governance and track record. 

Is there enough data to assess risk? 

Institutional investors rely on historical data to assess risk and determine appropriate return expectations. 

In residential rental, this remains a constraint. 

Heleen notes that the sector has a relatively short track record and limited consolidated data available, which makes it difficult to judge what level of return is appropriate for the risk being taken. 

Without comparable data across cycles, pricing and allocation decisions are harder to make. 

How access and liquidity affect allocation 

Liquidity and exit remain key considerations Institutional investors need clarity on how capital is deployed and how it can be returned or rebalanced within a portfolio. 

Heleen highlights that this is one reason debt structures are often used as an entry point. They may provide defined investment terms and greater clarity on how and when capital is expected to be repaid. 

These structures can offer a clearer path to exit while still providing exposure to the underlying theme. 

How does residential rental enter institutional portfolios? 

Residential rental is not always accessed directly as a standalone allocation. 

It often enters portfolios through broader investment vehicles, particularly credit strategies, where it is assessed alongside other opportunities. 

The asset class often enters portfolios gradually and becomes more established over time. -Heleen Goussard, 24:40 

Aggregation and scale support this process by making opportunities easier to assess and allocate to by creating larger portfolios, supporting diversification and enabling more consistent reporting. 

How impact should be measured 

Impact is an important consideration for institutional investors, but it must be defined and measured clearly. 

Heleen emphasises that while narrative is useful, consistent measurement aligned with recognised standards is becoming increasingly important. 

This allows investment committees to evaluate impact alongside financial outcomes. 

What enables institutional allocation 

Residential rental can be included in institutional portfolios when several conditions are met. 

These include a clear return profile, credible operators, sufficient data to assess risk, appropriate access structures and consistent impact measurement. 

Where these elements are in place, the asset class becomes easier to evaluate within a broader investment framework.