A push for greater diversity on the boards of real estate investment trusts has led to higher returns, according to a new study by Ferguson Partners.
The firm's REIT Diversity Report analyzed 134 publicly traded, internally-managed equity REITs to determine whether there is a relationship or correlation amongst REIT boards deemed to have a higher degree of diversity and the level of total shareholder returns over various time periods. It found that boards in the top 50% by diversity have outperformed those in the bottom 50% by diversity across the one-, three- and five-year time periods.
The median level of cumulative outperformance over five years for those boards rated in the top 50% of board diversity versus those in the bottom 50% clocked in at 2,390 bps. The delta was 720 bps over three years and 120 bps over one year.
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