The Power Behind the Accordant ODCE Index Fund: Patented Indexing Technology

Most investment managers have their own version of a “secret sauce” – a system or process they claim drives their success. For the Accordant ODCE Index Fund, that secret sauce comes in the form of a patented indexing process – a process that makes it possible to mimic the performance of the NFI-ODCE Index with minimal tracking error, and a process that no other firm has the rights to replicate. This is what we call a competitive advantage in its purest form. 

This patented capability was developed by the Fund’s sub-adviser, IDR, and has been successfully implemented by IDR since 2018 on behalf of some of the largest institutional investors in the country. By implementing this same approach, we are able to offer a private real estate indexing solution that has historically only been available to large institutional investors. This method leverages data-driven insights, proprietary technology, and a comprehensive indexing process that has historically been unavailable in the private real estate sector. 

What Is the Patent?

At the heart of this innovation is a Process Patent, granted by the United States Patent and Trademark Office in 2021. This patent protects a proprietary process designed to methodically replicate the performance of the NFI-ODCE Index—an industry benchmark that tracks high-quality, stabilized private real estate assets across the U.S.

The index itself provides limited information about its underlying investments, making it difficult for most investors to understand, let alone replicate. However, the patent ensures a structured, data-driven approach to achieve a consistent portfolio outcome not available anywhere else. This process is critical because it removes much of the guesswork involved in traditional real estate investing and relies on a rigorously designed system to guide allocation decisions based on real-time data. 

How It Works: RADAR and Real-Time Data Processing

The result of years of development behind this indexing strategy is RADAR, a proprietary data analytics system that powers the entire process. RADAR (Real Asset – Data – Analytics – Reporting) processes the most up-to-date index data available through a series of sophisticated models designed to manage fund flows, allocations, and rebalancing. Through this continuous process, we maintain unparalleled visibility into an otherwise opaque private market index.

Why This Matters to Investors 

While traditional investment strategies often rely on picking managers in hopes of outperforming a benchmark, managers' performance can fluctuate, and investors who miss the window of success, risk underperformance, and potentially, illiquidity when they need it most. Now advisers have the option to offer their clients an indexing approach that provides the asset allocation benefits of private real estate without the timing and selection risk.

If you think you can pick the winners, consider this: our data shows that when comparing five-year trailing return metrics since 2000, on average, just 55% of the component funds—the funds that make up the NFI-ODCE Index—outperformed the index. For those that do outperform, further analysis will show that this performance tends to be cyclical across cycles. Moreover, the underperformance margin can be quite a bit greater than the outperformance margin.1 In our view, picking the wrong manager at the wrong time can lead to more difficult conversations with clients than picking the cost-effective alternative that is designed to move with the benchmark.

IDR’s patented indexing strategy doesn’t rely on guessing which manager will perform best. Instead, it aims to methodically mirror the performance of the NFI-ODCE Index, offering more consistency across market conditions without the need to chase performance cycles. 

Furthermore, our investors benefit from the same  allocation structure as IDR's institutional fund. Through this fund, IDR has been able to reduce costs associated with investing in the indexing strategy, and we pass through those savings to our investors, making it even more attractive.

A Competitive Advantage That's Never Been Available Before

The reason this strategy is so unique is because, until now, this level of transparency and precision, tracking a benchmark for private real estate, has not been available. It took years of building the RADAR system and refining the models to get to the system that now powers the first and only interval fund tracking the NFI-ODCE Index.² It makes it possible for investors to gain exposure to private real estate without the inefficiencies and costs that often come with manager-driven strategies.

Additionally, the sheer size of the strategy—backed by billions in assets under management—gives us the clout to invest directly with the component funds of the NFI-ODCE Index.³ This level of access is rare, as it requires substantial capital and sophisticated infrastructure to replicate effectively.

A Smarter Way to Invest in Real Estate

For investors seeking a more strategic approach to private real estate, this patented indexing approach represents a compelling alternative to traditional manager selection. Accordant offers advisers a holistic strategy that is efficient, cost-effective, and built to perform. No need to search, screen, select, and manage investments and managers individually—it’s investing made easy. 

This approach isn’t just reshaping how real estate investment works; it’s making institutional strategies accessible to individual investors who want the same benefits, without the uncertainty of chasing performance.

IMPORTANT DISCLOSURES

1. Sourced: IDR, as of Q2 2024.
2. As of April 2024
3. The fund will invest in the underlying component funds of the NFI-ODCE Index that comprise a material NAV of the overall index.

Accordant Investments LLC (“Accordant”) is an SEC registered investment adviser. For more information about our services and disclosures, please visit our website at www.accordantinvestments.com. This content does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any security or any other product or service managed by Accordant.

NCREIF Fund Index – Open End Diversified Core Equity (the “NFI-ODCE Index”). Indexes are unmanaged, do not incur management fees, costs, and expenses, and cannot be invested in directly. 

This information is educational in nature and does not constitute a financial promotion, investment advice or an inducement or incitement to participate in any product, offering or investment. Accordant is not adopting, making a recommendation for or endorsing any investment strategy or particular security or property mentioned in this article. All opinions are subject to change without notice, and you should always obtain current information and perform due diligence before participating in any investment. All investing is subject to risk, including the possible loss of principal. Accordant Investments, LLC (“Accordant”) cannot guarantee that the information herein is accurate, complete or timely. 

Past Performance does not guarantee future results. Therefore, you should not assume that the future performance of any specific investment or investment strategy will be profitable or equal to corresponding past performance levels. Inherent in any investment is the potential for loss. It should not be assumed that any investments in securities, companies, sectors, or markets identified and described in this content were or will be profitable. Diversification strategies do not ensure a profit and do not protect against losses in declining markets.

Accordant has not made any representation or warranty, express or implied, with respect to the fairness, correctness, accuracy, reasonableness or completeness of any of the information contained herein (including but not limited to information obtained from third parties), and they expressly disclaim any responsibility or liability, therefore Accordant does not have any responsibility to update or correct any of the information provided in this article. 

All real estate investments have the potential for value loss during the life of the investment and the sponsor can make no assurances that any investment will achieve its objectives, goals, generate positive returns, or avoid losses.

Investors should carefully consider the investment objectives, risks, charges, and expenses of the Accordant ODCE Index Fund. This and other important information about the Fund is contained in the prospectus, which can be obtained online by visiting www.accordantinvestments.com. The prospectus should be read carefully before investing.

Past Performance is No Guarantee of Future Results.

Investing in the Fund involves risks, including the risk that you may receive little or no return on your investment or that you may lose part or all of your investment. The Fund’s investment objective is to employ an indexing investment approach that seeks to track the NCREIF Fund Index – Open End Diversified Core Equity (the “NFI-ODCE Index”) on a net-of-fee basis while minimizing tracking error. There can be no assurance that the actual allocations will be effective in achieving the Fund’s investment objective or delivering positive returns. It is not possible to invest in an index. You cannot invest directly in an index and unmanaged indices do not reflect fees, expenses, or sales charges.

The ability of the Fund to achieve its investment objective depends, in part, on the ability of the Adviser to allocate effectively the Fund’s assets across the various asset classes in which it invests and to select investments in each such asset class. There can be no assurance that the actual allocations will be effective in achieving the Fund’s investment objective or delivering positive returns. 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. 
Additional risks related to an investment in the Fund are set forth in the “Risk Factors” section of the prospectus, which include, but are not limited to the following: convertible securities risk, correlation risk, credit risk, fixed income risk, leverage risk, and risk of competition between underlying funds.

Investors should consult with their selling agents about the sales load and any additional fees or charges their selling agents might impose on each class of shares.

The Accordant ODCE Index Fund is distributed by ALPS Distributors, Inc (“ALPS”). Accordant Investments LLC is not affiliated with ALPS.