Standard Life Investments (SLI) is celebrating the 10th anniversary of its Long Lease Property Fund.
The first of its type when it was established in September 2003, the fund holds awell-diversified and high quality portfolio of UK real estate assets, which have performed well in all market cycles.
Since inception the fund has delivered a gross return to investors of 7.9 per cent p.a. During 2013 the fund has acquired or placed under offer assets with a value in excess of GBP400m and continues to generate strong investment opportunities from principally off market deal sources.
Laurie Todd, chair of trustees, Coats Pension Plan, says: “We are tremendously pleased to have been an investor in the Standard Life Investments Long Lease Property Fund since inception. The fund was extremely innovative when it was launched and has delivered strong and reliable investment returns over the long term. With concerns about the prospects for higher inflation over the long-term at the forefront of many investors’ minds we believe the fund should be viewed as a core holding by institutional investors. We wish Richard and his team a profitable second decade.”
Richard Marshall, fund manager, Long Lease Property Fund, says: “We are delighted that in its first decade the Long Lease Property Fund has produced consistently strong and reliable returns for our institutional investors while continuing to adapt to changing market conditions. Recent deal activity will increase exposure to alternative types of commercial real estate such as car parks and student accommodation, whilst increasing the unexpired lease term to in excess of 24 years.
“As we continue to diversify the fund by covenant and market sector, I am confident that the investments we have in the pipeline will further enhance the overall yield. The percentage of income subject to fixed or RPI reviews will rise to circa 90 per cent next year, assisting our investors in matching their pension fund liabilities.”
The Long Lease Property Fund enables institutional investors to add value over a traditional bond allocation to better assist in the payment of pension fund deferred and pensioner liabilities. The fund continues to be open for new investment.