F&C, which is a part of BMO Global Asset Management, launched the Guernsey based offshore version in 2005. It is managed by Marcus Phayre-Mudge, Alban Lhonneur and George Gay.
It has a hybrid structure investing in both UK direct commercial property and quoted real estate securities primarily in the UK and continental Europe. Real estate equities make up 65% of the fund while physical property comprises 35%.
This ‘blended’ approach aims to deliver attractive income and long-term growth, with the advantage of the liquidity and diversity gained from investing in property equities, F&C said.
The assets of the offshore fund, currently yielding 4.9%, have been transferred to the new UK OEIC.
The Guernsey company has become a ‘feeder’ to the new onshore fund for investors that do not wish to change their tax base. The migration to the onshore structure does not affect the investment strategy of the fund or its holdings, F&C said.
“Last year was strong for both European property equities and commercial property in the UK,” said Phayre-Mudge. “In 2015, we expect income yielding real assets, such as property, to benefit from further reduction in both the price of risk and the lack of attractive alternatives – particularly given the skinny income returns from fixed income assets. We continue to seek out those pockets of real rental growth created by the lack of new development across Europe, and in physical property we look for buildings in a number of supply-constrained UK sub-markets,” he added.
