DDR Corp has designated 25 retail centers and five plots of land to sell over the next two years as it seeks to shed smaller properties and focus on high-quality assets, said President and CEO David Oakes. "[T]he most challenging part of selling true non-institutional-quality real estate is overwhelmingly finished at this point. ... I think that the next steps of it going forward represent something much closer to a portfolio-management exercise of looking at the entirety of what we own and saying what represents something that has either lower growth or higher risk over time."
Portfolio management is among the CFO's toughest roles, but it's a necessary one. Companies that frequently allocate capital generate a higher return, according to a study. As the economy gains momentum and shareholders become more active in management, CFOs must step up their portfolio-management process, Vincent Ryan writes.
Online services such as Wikinvest and Investor Watchdog aim to provide greater detail of how investors' portfolios are doing, and some advisers use portfolio-management software to grade performance. But performance reporting is something the advisory industry says is fraught with difficulty. "There's a risk that you end up focusing clients too much on the rate of return instead of getting them focused on their goals over time," said Mike Leonetti, CEO of Leonetti & Associates.
Unibail is purchasing several large shopping malls from Simon Property Group and Ivanhoe Cambridge for $966 million. It also recently sold five malls for $317 million. The sales transaction was likely done for portfolio-management purposes, analysts say. "These shopping centers probably didn't meet an economic return target above their cost of capital," said Collins Stewart analyst Aaron Guy.
Ray Stone, chief economist at Stone & McCarthy Research, said the U.S. Federal Reserve's balance sheet, bloated by asset purchases, could become a major liability if inflationary pressure surges. "They've created a monster that they don't fully appreciate," Stone said. "They have a portfolio-management problem."