Kames launches new active value fund
Kames Capital has launched a closed-ended version of its Active Value Property Fund with founding investor commitments of GBP115m.
The new closed-ended version of the Active Value Property Fund will follow the original open-ended investment strategy, targeting the good quality secondary property market, particularly those properties in the sub GBP15m price bracket.
Kames, which has been running its Active Value strategy for nearly four years, believes that outside of the prime London markets it is possible to add value for property investors by picking good quality assets, which offer attractive income returns whilst also offering good asset management potential with a view to enhancing the value of the asset.
The closed-ended fund will be managed by Helen Batten in the Kames property investment team reporting to Kames property director David Wise (pictured).
The existing open-ended Active Value Property Fund, which has a net initial yield of over eight per cent and does not use debt, has delivered a return of 8.5 per cent per annum to investors since the launch of the fund in December 2009. This compares favourably with the IPD/AREF benchmark return of 7.2 per cent per annum.
Wise says: “There are still plenty of exciting opportunities in the secondary property market, particularly in the sub GBP15m sector. It is an area often neglected by large property funds and is probably out of reach for the majority of smaller commercial property investors especially now that debt for such properties is both hard to come by and expensive.”
Kames head of property investment Phil Clark says: “This fund builds on the investment track record we have developed in this strategy over nearly four years, and for which Helen Batten and David Wise are well known. Their expertise lies in stock selection, asset management and releasing that added value through successful sale of the properties. The fund is consistent with our investment philosophy as active managers focussed on delivering attractive income returns to investors.”
The Closed-Ended Active Value Property Fund has a seven year life with the opportunity to extend for a further two. The fund structure is a Jersey Property Unit Trust. It has a target return of eight to 10 per cent a year.