The NFI-ODCE Performance Attribution (ODCE-PA) is a form of absolute attribution that breaks down fund returns into unleveraged property returns plus or minus the incremental impacts of ownership / fund vehicle structuring components, including leverage, fund costs, cash balances and other items. Absolute attribution drills down to better understand the drivers of the NFI-ODCE returns.
It is one way to look at the main drivers of the overall index total return. The NFI-ODCE returns are mainly driven by the underlying property investments in the funds. Other significant impacts include leverage, joint venture deal structuring, cash balances and fund costs.
ODCE-PA is not relative attribution that compares a portfolio to the index, such as property level Brinson attribution that deconstructs over- or underperformance into active portfolio management sector allocation and investment selection decisions. NCREIF, however, provides the data and information necessary to complete relative attribution.
The NCREIF Fund Index – Open-end Diversified Core Equity (NFI-ODCE) was created in 2005 as NCREIF's first fund level, strategy based benchmark. NFI-ODCE started out with 14 active funds and has grown significantly over the years as managers created additional open-end core diversified funds. As investors, managers, and consultants switched their benchmarks from the NPI to NFI-ODCE, it became the industry's premier private equity open-end core fund benchmark.
To support this performance evaluation, NCREIF needed to provide full disclosure and transparency regarding the main attributes and key drivers of the benchmark. With absolute attribution of the benchmark, the industry at large can now compare a portfolio's performance to the benchmark.
NFI-ODCE Performance Attribution (ODCE-PA) is a form of absolute attribution that breaks down fund returns into unleveraged property returns plus or minus the incremental impacts of ownership / fund vehicle structuring components, including leverage, fund costs, cash balances and other items. Absolute attribution drills down to better understand the drivers of the NFI-ODCE returns.
ODCE-PA is not relative attribution that compares a portfolio to the index, such as property level Brinson attribution that deconstructs over- or underperformance into active portfolio management sector allocation and investment selection decisions. NCREIF, however, provides the data and math necessary to complete relative attribution.
The NFI-ODCE Performance Attribution Report is released approximately 60 days after quarter close.