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CBRE Global Investors to merge two funds

CBRE Global Investors is merging the CBRE Lionbrook Property Fund and CBRE UK Property Income Fund.

The merged fund has been re-named the CBRE UK Property Fund.
CBRE Global Investors started negotiations with the investors of Lionbrook and the Income Fund last year to merge the funds. The merged GAV GBP530m pooled fund will have a balance of assets and geographical diversification, retaining a bias towards London and the South East. The deal is expected to enhance income levels, asset diversification and add further opportunities for individual active management projects, all of which are projected to contribute to outperformance. The fund will have overweight exposure to the industrial sector, which is in-line with the manager’s focus towards income out-performance.
With the larger fund, investors from both funds will benefit from cost efficiencies arising from the improved quantum and the Lionbrook investors also benefit from:
§  Higher distribution
§  Greater asset diversification
§  A strategic move towards industrials and good secondary assets
§  A wider investor base
For Income Fund investors, the new CBRE UK Property Fund offers:
§  Significantly improved liquidity
§  Greater asset diversification
§  A more balanced exposure to prime real estate
§  Reduced level of gearing
The fund manager for CBRE UK Property Fund is Matt Mcdonald, formerly Lionbrook fund manager.
Michael Ness, UK head, CBRE Global Investors, says: “We have been in negotiations for some time with investors to ensure that both parties felt that this merger was the right thing for them. We are very pleased that they have seen the benefits of a larger fund and that it will be advantageous to both sides. We now are looking forward to building on the recent success to grow this fund.
“The CBRE UK Property Fund has an experienced team with a good track record, and we are confident that the merged Fund will continue to deliver the attractive returns that our investors require.”
The CBRE Lionbrook Property Fund outperformed its benchmark over the five years to December 2013, and delivered a total return of 5.5 per cent in the quarter to December 2013.

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