Gravis Advisory has launched a specialist UK Reit fund as it expands into the property fund sector and capitalises on “the current focus on liquidity”.
The VT Gravis UK Listed Property Fund (GULP) will be the firm’s third Oeic and will be managed by Matthew Norris (pictured), who joined Gravis as head of real estate securities in July.
Gravis Advisory, a subsidiary of Gravis Capital Management, said the fund will offer daily dealing with the aim to remove the risk of gating.
Investments will primarily focus on UK Reits but will also include property related closed ended investment companies, corporate bonds and equities. It will have minimal exposure to the UK retail sector and will not hold any direct property investments.
‘Focus on liquidity’
AJ Bell head of active portfolios Ryan Hughes said: “This launch looks to capitalise on the current focus on liquidity and the move away from physical property funds towards those investing in Reits.
“The indicated initial portfolio shows a differentiated approach to property with exposure to areas such as healthcare and residential property which certainly gives it a different feel to other funds in this space albeit, the use of residential property may be off-putting for some investors.”
In a press release, Gravis said Reits are structurally suited to provide liquid access to an illiquid asset class and is therefore able to focus on long term portfolio returns.
It said GULP aims to avoid a repeat of the situation that followed the Brexit referendum in June 2016 when a number of funds holding properties directly were forced to temporarily close due to a lack of liquidity.
In line with the existing Gravis range, the new fund is expected to deliver a regular quarterly dividend, low volatility and capped charges taken from capital. The target yield will be of 4% per annum.
The fund will provide access to UK listed property securities that target long-term, dependable cashflows.
Hughes said the target yield may mean the fund will appeal to income seekers and the fund has been sensibly priced with a capped ongoing charges figure of 0.70%.
He added: “For those wanting exposure to property securities, there are already plenty of other options available with the likes of Schroders and BMO strong in this area but given the differentiated approach, this may appeal to some that want a more specialised strategy.”
Willis Owen head of personal investing Adrian Lowcock said: “With the back drop of Brexit the UK property infrastructure sectors have been under exposed as investors have been wary of the outlook for the UK economy.”
Chelsea Financial Services managing director Darius McDermott said he likes Gravis. “The team has a strong track record of success with fund and trust launches and while some areas of UK property are distressed right now, the team will be able to pick and choose and will also have access to specialist areas that retail investors don’t have.
“Their student property offering is very good and we’d expect to see that in the portfolio, as well as specialist care home products. In a world of low interest rates a 4% yield is attractive. Overall we are pretty positive.”
The fund will launch with an offer period which will run from 1 to 31 October.