North Row Capital’s new IFSL North Row Liquid Property Fund is now open to retail investors for a minimum investment of GBP10,000.
The fund is believed to be the UK’s first actively-managed UCITS core property fund, and offers investors liquid exposure to global real estate markets by synthetically recreating commercial property returns.
It does not buy physical property but rather achieves its returns by investing in property derivatives, as well as property equity and debt whose value is directly linked to commercial property markets.
The open-ended fund aims to deliver income and capital gains commensurate with investment in property markets over the long term, targeting a high income yield of 4.5 per cent to 5.5 per cent with low volatility.
Both the A (Institutional) and B (Retail) share classes have daily dealing, no performance fee, no entry/exit fee and a significantly lower ongoing charge than directly-invested funds available on the market. The minimum initial investment in the retail share class will be GBP10,000, with additional investments from GBP3,000.
Buoyant property markets and recent improvements in consumer sentiment have significantly increased investor appetite for property investing. Historically, the best property returns have been earned post-recession, with returns following the past three UK recessions averaging 35 per cent over 36 months in the UK. Currently 15 months after the official end of the last UK recession, the 11 per cent property returns seen so far indicate that further improvement is likely and expected.
Simon Wombwell, CEO of Brooks Macdonald Funds, says: “The IFSL North Row Liquid Property Fund provides a unique investment proposition which we believe will be very appealing to a wide range of UK retail investors.
“Investors looking to benefit from rising property markets, but who are uninterested or unable to purchase property directly, can look to the fund as an opportunity to attain commercial property returns through a much lower minimum investment and without the liquidity restrictions associated with slower moving bricks and mortar investments.”
Steven Grahame, fund manager, says: “As UK GDP growth continues to bolster the UK economy, we believe that total returns from property will be in excess of 12 per cent in 2014, compared to an industry consensus of 9.3 per cent. Our approach in identifying relative value across property asset classes allows us to actively manage whilst avoiding the costs and delays in transacting physical property. We believe investors have long wanted an efficient way of gaining immediate exposure to property, and that’s what our fund can deliver.”