Lost in the wake of recent weeks' market excitement was this article in the Wall Street Journal [$] detailing the REIT industry's effort to persuade investors to allocate more real estate investment dollars in the public market via REITs. REIT supporters lament the possibility of losing capital to private equity firms under false assumptions that private equity generate better returns. In addition, they also decry the pension-fund advisers for putting fees above their clients' interest.

Real estate, private equity and institutional advisory services were prominent topics of David Swensen's seminal book, Pioneering Portfolio Management (see my review of this book). David Swensen, the influential architect of Yale University's endowment fund investment strategy, de-emphasizes liquid stock and bond investments in favor of illiquid areas such as real estate, private equity and commodities. Yale's success means this blueprint has been copied by many other institutions, with mixed results.