2020 Effective Date to Report TGER Draws Close

25 September 2020 - The impending rollout of the Total Global Expense Ratio (TGER) across the non-listed real estate fund industry has been an important topic of conversation this year among managers, investors, industry bodies and asset servicers.  

This article seeks to assist managers with reporting TGER in the context of a compliance date that will become effective this year: funds with a fiscal year-end of December 31 will need to be compliant with TGER in 2020, therefore, these managers should start addressing TGER compliance now – while funds with non-fiscal year-ends will face deadlines in 2021.

The objective of TGER is to facilitate comparisons of fees and costs between real estate funds that operate across different regions of the globe, regardless of whether such fees and costs are charged directly or indirectly to funds by investment managers and third party service providers. 

Considering the many different ways in which fees and expenses associated with participation in a fund have historically been categorized, defined and accounted for, comparisons across products and borders has been particularly challenging. The new standard aligns terminology and definitions globally for the most widely used categories of fund fees and costs.

While TGER’s key principle of creating a globally comparable measure of fees and costs for real estate funds is clear, a variety of questions related to the implementation exist. The below discussion is intended to address some of the more relevant questions:


Q: Is TGER replacing INREV TER and Reporting Standards REFER?

A: TGER represents the next generation of INREV TER and RS REFER by combining the best features of each metric to better align with investor needs across geographies. TGER will be reflected in the INREV Guidelines and NCREIF PREA Reporting Standards. For those already reporting TER and/or REFER, the transition to TGER must be completed by the effective date. 


Q: REFER was a recommended metric for compliance with NCREIF PREA Reporting Standards; is TGER also recommended?

A: Unlike REFER, TGER is a required annual metric that an investment manager needs to report in order to be compliant with NCREIF PREA Reporting Standards.


Q: What is the implementation date for the TGER?

A: Funds with fiscal years ending December 31, 2020 will be required to report TGER for the first time on December 31, 2020. Funds with fiscal years other than December 31 (e.g., March 31, June 30, September 30, etc.) will be required to report TGER for the first time in fiscal 2021 e.g., March 31, June 30, September 30, 2021. Managers must adhere to these deadlines in order to remain NCREIF, INREV, and ANREV compliant. It is encouraged that managers begin work on implementation prior to their fiscal year ends in order to avoid any issues with gathering the relevant data.


Q: What is included and excluded as components of the TGER?

A: The fees and costs that should be included in TGER are those which are generally associated with a fund’s operations. However, these fees and costs are sometimes recorded in entities below the fund vehicle. Therefore, it is important to analyze the nature of the TGER components rather than where they are recorded within the fund structure.

Included and Excluded table web


Q: Where and how is a fund expected to present and report its TGER?

A: A finalized TGER should be reported and presented in the manager notes section of a fund’s annual financial report. All relevant disclosures must also be provided, which include annual period over period fee, cost and GAV/NAV changes. Related Party Disclosures in accordance with section 3.10(f) of Reporting Standards Fair Value Accounting Policy Manual can also be referenced.

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Q: How do I calculate and report weighted average GAV?

A:There is no prescribed manner in which weighted average GAV is calculated within the industry.  However, it is recommended that the weighted average GAV calculation follow existing performance measurement guidance as a basis. One example is weighted average NAV + weighted average debt as a proxy for weighted average GAV. The calculation methodology should be disclosed.

Should you have any questions relating to TGER and its implementation, our Real Assets Client Service team is on hand to answer any of your queries.

Barbara Flusk is Head of Real Assets, Citco Fund Services (USA) Inc and is a Co-Chair of the TGER Global Fee and Expense Workgroup Initiative.  She is a member of the Global Standards Steering Committee that was formed by NCREI, PREA, INREV and ANREV to promote global real estate standards and is a member of the NCREIF/PREA Reporting Standards Council.

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Barbara Flusk

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Donald Pace

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