Integrated Wealth Concepts & USQ
USQ strategies offer access to institutional private real estate by investing in NFI-ODCE(1) constituents.
For Integrated Wealth Concepts advisors only
Why this asset class?
Core private real estate is a bellwether asset class that should be viewed as a strategic allocation through all environments. Core commercial real estate offers stable cash flows, low volatility, consistent returns, and provides low correlation to stock and bond markets, ensuring strong diversification. It should be noted that core commercial real estate consists of multiple property types including industrial, multi-family, office and retail. Currently, office represents less than 20% of the overall core commercial real estate market in the U.S.
As rates rose rapidly in the past 12 months, the asset class has experienced slight declines to account for higher financing costs and capitalization rates. However, we believe rates have stabilized, and due to the strength of the underlying fundamentals, we believe there is an attractive entry point. Additionally, because rates have risen, new development has slowed dramatically. Therefore, stabilized assets are likely to see more demand in the future, which has historically led to strong returns.
Why was USQ added as a solution?
USQ offers a solution unlike any other interval fund. The strategy utilizes a straightforward, no-nonsense approach to a core real estate allocation with an attractive price point. It provides access to core private real estate by investing exclusively in the members of the NFI-ODCE, which is the premier benchmark comprised of leading institutional real estate sponsors and their flagship funds and which dates back to 1978.
How should Integrated Wealth Concepts use this strategy for client allocations?
Integrated Wealth Concept clients can utilize this strategy in a number of different ways, such as an individual allocation to help increase portfolio income potential or as part of a more comprehensive alternatives program within the portfolio. Private real estate can be utilized to reduce potential volatility from an equity portfolio or enhance returns for a fixed income portfolio.
Why consider the USQ Core Real Estate Fund (USQIX)?
Fund invests exclusively in NFI-ODCE funds with diversification across property types and geographies.(1)
Low leverage (35% cap) - current leverage of just 25%.(2)
No public REIT exposure. No public/private debt exposure.
Ease of use
Daily purchases, no minimums,(3) and
No sub docs.
1099 tax reporting.
Lowest net expense ratio equity real estate interval fund.(4)
1.12% net expense ratio.(5)
No performance fees.
No transaction fees (NTF) at LPL.
What is the NFI-ODCE?
The NCREIF Fund Index - Open End Diversified Core Equity (NFI-ODCE) is an index of investment returns of the largest private real estate funds pursuing lower risk investment strategies utilizing low leverage and generally represented by equity ownership positions in stable U.S. operating properties diversified across regions and property types. The NFI-ODCE (pronounced as “odyssey”) has been widely used since 1978 to track institutional core private real estate returns.
What is an interval fund?
Interval funds are classified as registered closed-end funds under the Investment Company Act of 1940, although interval funds have characteristics more like those of an open-end mutual fund. Interval funds offer their shares continuously and shares are redeemed at Net Asset Value (NAV) — similar to an open-end mutual fund.
Access to institutional private real estate
The USQ Core Real Estate Fund is a continuously offered closed-end interval fund that provides investors with access to institutional private real estate by investing exclusively in NFI-ODCE* constituents.
Advisors and their OSJs must have completed the “Interval Fund Training and Attestation” course (course number 21CLR_090) in LPL's Learning Center. Additionally, clients must have signed the “Interval Fund Acknowledgement Form” (form number F805) prior to their first interval fund purchase.
Ready to talk about allocating capital to the USQ Core Real Estate Fund?
Contact us today.
1. NCREIF Fund Index — Open-end Diversified Core Equity (NFI-ODCE) consists of private real estate equity funds that meet certain criteria with respect to such things as leverage (less than 35%), operations (at least 75% invested in properties that are 75% or more leased), sector and geographic diversification, and investment in core real estate (at least 75% in office, industrial, apartment and retail properties). One cannot invest directly in an index.
2. Source: NCREIF as of 9/30/23.
3. Minimums waived for RIA Platforms.
4. Obtained from intervalfunds.org as of 6/30/2023. As compared to the net expense ratio of the 10 interval funds with assets greater than $0 included in the Equity Real Estate category.
5. Class I gross expenses are 1.28% and net expenses are 1.12%. Net fees are based on a contractual fee waiver and reimbursement agreement that will continue indefinitely until terminated by mutual agreement of the Advisor and the Fund, including consent of the Independent Board of Trustees.
The USQ Core Real Estate Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. The Prospectus and most recent periodic reports contain this and other important information about the investment company, and may be obtained by calling (833) USQ-FUND/ 833-877-3863, or visiting usq.com/funds Read the Prospectus carefully before investing.
The USQ Core Real Estate Fund is a closed-end interval fund distributed by Quasar Distributors, LLC.
Investing in the Fund’s shares involves substantial risks, including the risks set forth in the “Risk Factors” section of this prospectus, which include, but are not limited to the following: Investing in real estate entails special risks, including (i) changes in general economic and market conditions; (ii) changes in the value of real estate properties; (iii) risks related to local economic conditions, overbuilding and increased competition; (iv) increases in property taxes and operating expenses; (v) changes in zoning laws; (vi) casualty and condemnation losses; (vii) variations in rental income, neighborhood values or the appeal of property to tenants; (viii) the availability of financing and (ix) changes in interest rates and leverage. There are also special risks associated with particular real estate sectors, or real estate operations generally.
The Fund is not intended to be a complete investment program, but instead as a way to help investors diversify into real estate. Diversification does not ensure a profit or guarantee against a loss. There currently is no secondary market for the Fund’s shares and the Adviser does not expect that a secondary market will develop. Limited liquidity is provided to shareholders only through the Fund’s quarterly Repurchase Offers for no less than 5% of the Fund’s shares outstanding at net asset value. There is no guarantee that shareholders will be able to sell all of the shares they desire in a quarterly Repurchase Offer.
Quasar Distributors, LLC is not affiliated with LPL Financial LLC.