Borrowing from the success of the IMA £ Strategic Bond sector, which grants fund managers the flexibility to make asset allocation calls across the fixed income spectrum, the new fund will be marketed on its ability to invest across both bricks and mortar and global REITS.
The offshore £56.9m fund is currently split 65% in global property securities and 35% in UK direct property, while its benchmark is 50% IPD and 50% FTSE Developed Europe ex-UK Index.
Co-managers Marcus Phayre-Mudge and Alban Lhonneur look after the real estate securities part of the portfolio, with George Gay investing in direct property.
The UK-listed fund, managed by the same team, is due in Q4. While, as yet, there is no formal plans in place to change its name, F&C head of consumer Robert Thorpe said a rebrand may be on the cards.
“We want to position the fund with investors as a core fund where the decision of whether to hold bricks and mortar or securities, and geographic allocation, is left to us to seek the best opportunities – in the same way strategic bond funds leave the decision on the credit spectrum and duration is left to the manager,” he said.
While investing directly into bricks and mortar is arguably the preferred route into the asset class for UK retail investors, the memory lingers of when redemptions were halted in a number of high profile funds in 2008. Investing in listed securities, through REITS, therefore also has a place for those investors concerned about cashflow and liquidity.
In January, F&C launched Global Real Estate Securities Fund, run by Phayre-Mudge and Lhonneur, designed to beat the EPRA/NAREIT Developed Global Index in all market conditions.
