Standard Life Investments (SLI) has re-launched its GBP420m Select Property Fund as the Standard Life Investments Global Real Estate Fund.
The fund will continue to be led by Andrew Jackson, head of wholesale and listed real estate, and Svitlana Gubriy as deputy manager, with support from a team of portfolio managers and real estate securities analysts.
The fund’s new strategy allows for investment predominantly in real estate markets in both direct and listed real estate securities, including real estate investment trusts (REITs), on a global basis. It aims to hold a higher and more persistent investment in direct real estate assets, seeking a range of 50 per cent to 80 per cent of the fund’s overall value in this area. It is intended that this will deliver a more stable mix of assets, lower volatility in the fund’s price movements and the potential for a higher income yield.
Reflecting the new bias of the fund towards direct real estate markets, the benchmark of the fund will change from the IMA Property Sector, which is increasingly populated by real estate securities only funds, to a more representative IPD Direct/MSCI World Real Estate Custom Index, which will include both direct and listed real estate assets. In addition, the fund will no longer hedge its foreign currency exposure.
Jackson says: “We engaged with clients over a period of time and conducted extensive research across a range of distribution channels into how this fund might adapt to best support the needs of our investors going forward. We believe this positive realignment of the fund will enable us to take ongoing but increased advantage of the tangible benefits of direct real estate investment alongside the enhanced accessibility of real estate securities.
“Investing in real estate on such a diverse basis spreads investment across a range of markets and sectors. Following the global financial crisis and subsequent recession, many economies are now at different stages of recovery and, as a result, many real estate markets around the world are becoming more attractive. The international hybrid structure of the Global Real Estate Fund means that we have the flexibility to move between those real estate markets and sectors that we believe offer the best return opportunities at any given time. I have every confidence that investors in the fund will benefit from these changes and from the extensive multi-jurisdictional real estate expertise at Standard Life Investments.”