The Quay Global Real Estate (ASX: QGRU) strategy continues to merit its High Process and People Pillar assessment, reflecting our ongoing confidence in the team and in the strategy’s differentiated and effectively executed investment approach.

Justin Blaess and Chris Bedingfield have extensive experience in the real estate domain with a proven track record. They have built a cohesive and dynamic unit at Quay Global Investors. Blaess and Bedingfield are supported by Gavin Truong, who was recently promoted to an assistant portfolio manager role, and three investment analysts. Although the analysts are relatively junior in terms of industry experience, the hiring decisions are well-thought-out and deliberate. An increase in the headcount creates more bandwidth in the team to efficiently allocate time and effort.

The process is index-agnostic, targeting global real estate stocks that can exceed an absolute return hurdle of Consumer Price Index plus 5% through a combination of quantitative, qualitative, and fundamental analysis. It allows for high-conviction bets on companies that are smaller constituents of the broad opportunity set, widening the potential avenues to generate alpha. For example, investments in smaller companies from the ex-US stock universe have been large contributors to the fund’s outperformance—a key differentiator versus many peers. The propensity of the strategy to consistently pinpoint such ideas and themes underpins our strong view of its investment process.

Further, capital protection in down markets is a vital strength of the process. For instance, it safeguarded investor capital during the market volatility in 2020 while delivering outsize returns through skillful stock selection in 2021 and 2023. Performance can deviate significantly relative to the category index, especially over shorter periods. However, this is an expected characteristic of its return profile, and we expect it to add value over the long term.

In summary, for investors seeking a high-conviction approach, this strategy has strong potential to deliver superior long-term outcomes.

Distinguished process driven by consistent outcomes across various market environments

Quay Global Real Estate mixes quantitative, top-down thematic, and fundamental research to build a high-conviction portfolio of 20–40 names with no real regard for the benchmark. The investable universe is screened by applying four quantitative factors: geography, revenue composition, data quality, and liquidity. The initial screens also knock out diversified companies and real estate developers in addition to emerging-market REITs.

This results in around 300 names that are then ranked by value and growth factors using the proprietary screening model. Broad qualitative themes act as guides to identify companies and subsectors that are supported by long-term and pervasive tailwinds.

Once screened and ranked, the balance-sheet strength, replacement costs, and the sustainability of payout ratios are assessed using multiple valuation frameworks to determine if a stock meets the total return hurdle of CPI plus 5%. Both portfolio managers must agree for a stock to enter the portfolio. Stock weights are determined by factors such as level of confidence in the expected total return, financial strength, near-term supply risks, and more.

Quay’s index-agnostic approach allows the team to be flexible and take advantage of a wider opportunity set compared with competing index-aware strategies. This flexibility has enabled the strategy to achieve strong long-term results across diverse market conditions, a testament to the robustness of its process.

The benchmark-agnostic nature of Quay Global Real Estate permits the portfolio to delve into opportunities beyond the typical opportunity set for other active managers in the global real estate space. This also means that some sectors or regions can be absent or significantly under/overweight relative to the FTSE EPRA Nareit Developed Index (Morningstar Category benchmark).

The team identifies secular and cyclical themes that can provide tailwinds to the earnings story. Japanese demographics is one of the identified “antithemes”; the portfolio has never held a Japanese name since its inception. As of February 2026, the portfolio favors manufactured and single-family housing, multifamily apartments, self-storage, and healthcare, believing these sectors will benefit from strong demographics and undersupply. The exposure to US companies, while being underweight relative to the category index, continues to make up a chunky allocation of around 54% as of February 2026. The typical number of holdings is around 30-35 stocks. Holding large amounts of cash is not a typical feature, but it has a maximum limit of 20%, with the highest level reaching around 18% in April 2020.