Fund Focus
Morgan Stanley Institutional Fund Global
Real Estate Portfolio
by Michele Lerner
No one who knows him would ever call Ted Bigman an optimist. As a matter of fact, the managing director and head of global real estate
securities investing for Morgan
Stanley Investment Manage-
ment says, “I’m not necessarily
pessimistic, but, like most value
investors, I am a worrier.”
So, what keeps Bigman up at
night these days?
Morgan Stanley inStitutional Fund
global real eState portFolio
Ticker Symbol: MRLAX
AddreSS: 522 5th Avenue, New York, NY
Web Si Te:
www.morganstanley.com/msim
PHone: 1-800-548-7786
lAuncH dATe: August 2006
inveSTmen T AdviSorS:
Morgan Stanley Investment Management
To TAl ne T ASSe TS: $631.7 million*
oF HoldingS: 133*
WeigHTed AverAge mArke T cAP:
12,124*
Price: Year End NAV $7.47*
52 Week HigH: $7.80*
52 Week lo W: $3.58*
*All data as of 12/31/2009
MRLAX paid distributions of $0.27 during the 52-week period
ending 12/31/2009
“Investors cannot ignore
the 800-pound gorilla in the
room, which is the $3 trillion
of commercial debt coming
due in the next several years
in this country which cannot
easily be refinanced,” Bigman
says. “In what is known as the
‘pretend-and-extend’ move that
banks and the CMBS markets
have engineered, borrowers can
pay the debt service when it is
extended, but the big question
is when the underlying asset
values will improve.”
Despite the volatility in the
markets since Morgan Stanley
began investing in U.S. real
estate securities in 1995 and in
European and Asian real estate
securities in 1997, Bigman’s
core investment strategy has re-
mained unchanged. He and his
team of investors select stocks
based on the underlying value of
their real estate assets.
“Our basic view is that real
estate stocks are a complement
to or a substitute for owning real
estate outright for institutional
investors,” Bigman says. “We
look for ways to buy real estate
cheaper on Wall Street than on
Main Street.”
Ted bigman
While Bigman recognizes
that in the short term a variety
of factors can influence stock
prices, he says, “Over the medium term and the long term,
the price of real estate stocks
will move with the underlying
value of their portfolio. Our
models are based on looking at
what real estate is worth and
buying it at an attractive price.”
Holding Firm
Bigman holds firm even when
stock prices are dropping.
Sometimes he opts to increase
his bets if the underlying assets
have long-term value.
“No doubt, 2009 was a phenomenally volatile year, one in
