KPMG has posted a new paper looking at the role of real assets (defined as “anything where there is a tangible/physical asset being traded”) within a portfolio, with a focus on opportunities for U.K. based institutional investors, especially pension schemes.

It begins with a brief survey of the field. Real assets include:

Property funds. The report is concerned with two variants here, balanced property funds, which invest in a diversified range of U.K. real estate, and Long-lease property funds, which, as the name implies, invest in the leases (of up to 25 years) rather than the land properly speaking.The demand is growing for these funds, and sometimes an investor waits two years or more before he’s allowed to take a position.

Infrastructure equity. Aging infrastructure systems and “decades of underinvestment” have led to an increasing demand that governments can’t satisfy from public funds. For investors willing to abide by the illiquidity implied, KPMG believes that infrastructure “offers a good opportunity for accessing long term, real income streams.”

Private rented sector. Long-term renting is becoming more common in the major cities of the U.K. The developers of purpose built, professionally managed residential developments offer these rents in a way designed to take advantage of economies of scale. Their success has in turn created room for investors to jump on board.

Timberland. Timberland funds “buy and manage forestland with the aim of producing a return by maximizing harvest yields, and selling the timber to the construction and parcel/soft goods industries.” Many investors consider that existing fund structures are a hurdle here.

Global real estate secondaries (GRES). GRES funds bought up assets at distressed prices in the wake of the global financial crisis less than a decade ago. That has allowed them to deliver strong returns of late, but they will now have to show staying power, and investors may want to re-assess whether GRS is right for them going forward.