The future returns for property required by UK pension funds

In the 1970s Real Estate represented over 17% of the average pension funds total assets. Today such funds hold less than 4%, a figure not seen since the 1960s. This reduction in Real Estate holdings is mainly attributable to the relatively poor performance of Real Estate against other asset classes since the 1980s. Whether pension funds will increase their holding at any point in the future depends therefore on the expected return of Real Estate by comparison with that required to justify a particular asset holding. Using the technique of Modern Portfolio Theory (MPT), this paper assesses the required return that Real Estate would have to offer to justify a 15% holding in a mixed asset portfolio. This figure and the risk/return characteristics of the major asset classes is taken from survey data. Under a number of scenarios it is found that Real Estate can play a part in a mixed asset portfolio at the 15% level. In some cases however, the expected returns of Real Estate are not sufficient to justify a weight of 15% in this asset.

The future returns for property required by UK pension funds: the BHS data

Previous studies of the place of Property in the multi-asset portfolio have generally relied on historical data, and have been concerned with the supposed risk reduction effects that Property would have on such portfolios. In this paper a different approach has been taken. Not only are expectations data used, but we have also concentrated upon the required return that Property would have to offer to achieve a holding of 15% in typical UK pension fund portfolios. Using two benchmark portfolios for pension funds, we have shown that Property's required return is less than that expected, and therefore it could justify a 15% holding.

Required returns for real estate in UK pension fund portfolios

The position of Real Estate within a multi-asset portfolio has received considerable attention recently. Previous research has concentrated on the percentage holding property would achieve given its risk/return characteristics. Such studies have invariably used Modern Portfolio Theory and these approaches have been criticised for both the quality of the real estate data and problems with the methodology itself. The first problem is now well understood, and the second can be addressed by the use of realistic constraints on asset holdings. This paper takes a different approach. We determine the level of return that Real Estate needs to achieve to justify an allocation within the multi asset portfolio. In order to test the importance of the quality of the data we use historic appraisal based and desmoothed returns to examine the sensitivity of the results. Consideration is also given to the Holding period and the imposition of realistic constraints on the asset holdings in order to model portfolios held by pension fund investors. We conclude, using several benchmark levels of portfolio risk and return, that using appraisal based data the required level of return for Real Estate was less than that achieved over the period 1972-1993. The use of desmoothed series can reverse this result at the highest levels of desmoothing although within a restricted holding period Real Estate offered returns in excess of those required to enter the portfolio and might have a role to play in the multi-asset portfolio.

Smoothed histogram modification for image processing

The technique of constructing a transformation, or regrading, of a discrete data set such that the histogram of the transformed data matches a given reference histogram is commonly known as histogram modification. The technique is widely used for image enhancement and normalization. A method which has been previously derived for producing such a regrading is shown to be “best” in the sense that it minimizes the error between the cumulative histogram of the transformed data and that of the given reference function, over all single-valued, monotone, discrete transformations of the data. Techniques for smoothed regrading, which provide a means of balancing the error in matching a given reference histogram against the information lost with respect to a linear transformation are also examined. The smoothed regradings are shown to optimize certain cost functionals. Numerical algorithms for generating the smoothed regradings, which are simple and efficient to implement, are described, and practical applications to the processing of LANDSAT image data are discussed.

Modification of enrofloxacin treatment regimens for poultry experimentally infected with Salmonella enterica serovar Typhimurium DT104 to minimize selection of resistance

We hypothesized that higher doses of fluoroquinolones for a shorter duration could maintain efficacy (as measured by reduction in bacterial count) while reducing selection in chickens of bacteria with reduced susceptibility. Chicks were infected with Salmonella enterica serovar Typhimurium DT104 and treated 1 week later with enrofloxacin at the recommended dose for 5 days (water dose adjusted to give 10 mg/kg of body weight of birds or equivalence, i.e., water at 50 ppm) or at 2.5 or 5 times the recommended dose for 2 days or 1 day, respectively. The dose was delivered continuously (ppm) or pulsed in the water (mg/kg) or by gavage (mg/kg). In vitro in sera, increasing concentrations of 0.5 to 8 mu g/ml enrofloxacin correlated with increased activity. In vivo, the efficacy of the 1-day treatment was significantly less than that of the 2- and 5-day treatments. The 2-day treatments showed efficacy similar to that of the 5-day treatment in all but one repeat treatment group and significantly (P < 0.01) reduced the Salmonella counts. Dosing at 2.5x the recommended dose and pulsed dosing both increased the peak antibiotic concentrations in cecal contents, liver, lung, and sera as determined by high-pressure liquid chromatography. There was limited evidence that shorter treatment regimens (in particular the 1-day regimen) selected for fewer strains with reduced susceptibility. In conclusion, the 2-day treatment would overall require a shorter withholding time than the 5-day treatment and, in view of the increased peak antibiotic concentrations, may give rise to improved efficacy, in particular for treating respiratory and systemic infections. However, it would be necessary to validate the 2-day regimen in a field situation and in particular against respiratory and systemic infections to validate or refute this hypothesis.