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Ventas CEO courts generalist investors ahead of GICS change

's top executive made anovert pitch to generalist investors in the company's April 29 earnings call, inanticipation of an industry classification changethat is expected to drawa wave of new money to the REIT sector.

At theend of August, S&P Dow Jones Indices plans to transition real estate into a stand-alone sector under itsGlobal Industry Classification Standard, known as GICS. The change will move realestate out of the financials sector and is expected to draw new investors, and newscrutiny, to REITs.

In recentmonths, CEOs at some of the largest and most prominent public REITs — includingSimon Property Group Inc.and Equity Residential— have publicly and privately courtednew non-REIT-dedicated investors.

In heropening remarks on the company's first-quarter earnings conference call, Chairmanand CEO Debra Cafaro said the GICS change should attract more capital to real estateover time, and added, "We believe our size, leading position in health careand senior housing, track record of disciplined capital allocation and excellentteam make us attractive to generalist investors."

Cafaroalso cited the company's dividend growth, liquidity, investment-grade balance sheet,diversification, high-quality portfolio and growth opportunities.

"Honestly,if I were a generalist investor looking at GDP growth of half a percent in the firstquarter, corporate profits declining for three consecutive quarters and global weakness,Ventas looks incredibly attractive," she said. "To my mind, that's a compellingvalue proposition. So whether there's a new GIC or not, why wouldn't you want toown Ventas?"

Despitethe overture, Cafaro said the company "obviously" remains focused on itscore REIT-dedicated investors, who are "crucial" to its continued success.

S&P Dow Jones Indices andS&P Global Market Intelligence are owned by S&P Global Inc.