According to a report from Preqin, foundations that invest in private real estate funds favor higher-risk strategy funds.

As part of its Real Estate Online report, Preqin tracks 461 foundations based in North American that are currently investing in private real estate funds. Those funds have aggregate assets of more than $400 billion and appear to under-invested in the real estate class, according to Preqin’s Brian Chung.

Chung said that, on average, the funds have 6% of their total assets allocated to real estate, which is below their average target allocation of 7%. “This is particularly positive news for fund managers, as foundations look to move towards their target allocations and will therefore commit more capital to the asset class,” Chung said.

Chung also said that “opportunistic” funds are favored by 54% of the foundations Preqin tracks, while 53% utilize “value-added” strategies.

Chung said that as more foundations more towards their target allocations, “many will commit more capital to the real estate asset class,” with a specific focus on the higher-risk strategies, like value-added and opportunistic.