Sumários
Lecture 8: Other Real Assets
6 Outubro 2025, 12:00 • HAOXU WANG
In today’s session, I first finished the remaining material from last time: an introduction to and comparison of major real estate indices and a review of the historical performance of equity REITs.
I then moved on to investments in other real assets, covering natural resources (other than land), raw land, timberland, farmland, infrastructure, and intellectual property. For natural resources, the discussion centered on exchange-option/real-options intuition: why some resources are not immediately developed and how the option to wait can create value under uncertainty (i.e., time value of the option). I next introduced timberland and farmland, as well as raw land. For timberland and farmland, I focused on characteristics, access methods, advantages and limitations, and empirical evidence on historical performance. After that, I covered investable infrastructure, emphasizing its common attributes, classification methods, investment styles, access vehicles, return patterns, and the key opportunities and risks in this space. Lastly, I briefly talked about intellectual property investing, including its consistency with real-asset characteristics, a simplified valuation model, and the risks associated with investments in patents.
Lecture 7: Real Estate Investments II
1 Outubro 2025, 08:00 • HAOXU WANG
This second lecture on “Real Estate Investments” focused on commercial real estate (CRE) and covered three areas. I first discussed private market investment vehicles, introducing three ways to access private CRE: pooled private market real estate funds, separately managed accounts, and direct investing, with focus on their characteristics, advantages, and limitations.
I then moved to development and valuation of private market CRE. For development, the focus was on the intuition and estimation of the development yield and how it can assist with investment decision-making. For valuation, I introduced and analyzed three methods, outlining their advantages and limitations. A numerical example was used to demonstrate the discounted cash flow method, and I highlighted the challenges of applying this method in the context of CRE.
Finally, I examined public market investment vehicles by discussing the differences between publicly traded real estate investment trusts (REITs) and real estate operating companies (REOCs), the risk and return features of REITs, and the inconsistency between public investment structures and their underlying CRE assets in terms of liquidity.
The next lecture will complete the planned topics for this session first, covering CRE indices and the historical performance of equity REITs.
Lecture 6: Real Estate Investments I
29 Setembro 2025, 12:00 • HAOXU WANG
This lecture is the first lecture for the topic “Real Estate Investments", which is focused on private market commercial real estate (CRE) investments for institutional investors. The lecture was on two primary subtopics: 1) Overview of Real Estate and 2) Capital Stack and Financing Options for Real Estate, while the planned subtopic of Private Market Investment Vehicles will be moved to the next session.
The lecture began with a broad introduction to real estate investments to help students understand the topic from the perspectives of both real estate project managers (developers) and investors. I explained how the financing decisions of real estate developers are directly related to different real estate investment opportunities. Following that, I introduced a framework for distinguishing real estate, explained the advantages and disadvantages of including CRE in an institutional portfolio, and discussed the three real estate investment styles. Their definitions, characteristics, key attributes, and related portfolio styles were examined, along with the purposes of style analysis.
Regarding the second subtopic, I explained why understanding the capital stack is critical for institutional investors in private market CRE. I then introduced and compared different types of commercial mortgages and alternative financing methods, and outlined their advantages and disadvantages.
Make-Up Session (3pm 10th Oct 2025) Summary
24 Setembro 2025, 08:00 • HAOXU WANG
The make-up session is a revision session for the midterm exam. Students may refer to the notes document used during the session to revise the content.
Lecture 5: Introduction to Commodities and Commoditity Derivatives III
22 Setembro 2025, 12:00 • HAOXU WANG
This lecture, the final session on the topic: “Introduction to Commodities and Commodity Derivatives”, began with a detailed discussion of roll returns and rollover strategies with focus on i) three key propositions regarding (basis-change-related) roll returns, ii) the interrelationships among roll return, the basis, and carrying costs, as well as iii) whether and how roll returns and roll strategies can be linked to the existence of alphas (i.e., superior or abnormal returns).
The lecture then introduced two important concepts in commodity futures and forwards: normal backwardation and normal contango, along with Keynes’s reasoning for the typical existence of normal backwardation. It then explained why commodities generally have low correlation with stocks and bonds, and the implications for commodities as diversifiers in both perfect (or CAPM) and imperfect markets. The usefulness of commodities as a hedge against inflation risk was also mentioned.
The next section focused on expected returns and risks of commodities, covering both empirical and theoretical evidence on expected returns through physical inventories. It was also pointed out that expected commodity futures returns are not necessarily relevant to expected spot returns. Following this, the lecture described four favorable characteristics of commodities with respect to event risks, potential sources of commodity price volatility, and why commodities can help reduce downside risk.
The second-to-last part of the lecture examined the construction, uses, and defining characteristics of commodity futures indices, with a brief introduction to three major indices in practice. The lecture concluded with a review and discussion of the historical performance of commodities (i.e., S&P GSCI index returns).
The next lecture will begin a new topic: Real Estate Investments.