Nedgroup Investments identifies new opportunity set amidst Covid-19 and launches two new property fund share classes
Due to increasing investor demand Nedgroup Investments, which runs an independent multi-boutique asset manager business model, has increased its product offering by launching two new share classes – GBP (Accumulation and Distribution) – for its Global Property fund.
The launch also follows strong performance for the fund, which benefited from early allocations to sectors that were resilient during government policy responses to Covid-19, such as logistics, data centres and life science offices, and the nature of the strategy, which outperforms in falling markets by focusing on quality buildings, held by strong companies, managed by excellent teams.
The share classes are currently in the fund raising stage, and already have around USD50 million in committed capital, with a significant pipeline of interest and inquiries. Whilst the fund runs a growth strategy, the income share class will benefit from a dividend yield of around 3 per cent.
Robin Johnson, head of investments at Nedgroup Investments, says: “Even in uncertain and unprecedented times, our commitment to providing clients access to sector leading strategies remains as strong as ever. We based our decision to launch these two new share classes on investor demand, and we anticipate further uptake in future.”
The fund’s disciplined investment process emphasises a global sectoral perspective and focuses on long term wealth preservation and appreciation. Investing in global REITs the Fund has outperformed its benchmark and peer group significantly since inception. It typically outperforms in falling markets, which has been the case over the last 12 months where the market was down by about 21%. The relative performance has been around positive 900bps and over the longer term about 370 bps of relative outperformance.
The Global Property fund is run by Nedgroup Investments' partner Resolution Capital, with CIO and Founding Partner Andrew Parsons one of four highly experienced managers on the portfolio. Parsons' Sydney-based team has over 29 years’ experience in global financial and property markets. Prior to founding Resolution Capital Parsons worked for the Australian Stock Exchange. CS First Boston and Lend Lease, and is a past Chairman of the Property Council of Australia’s Capital Markets Committee.
Looking at the current state of the property industry, Parsons notes the relief rally in Q2 with the market up about 10 per cent. Many of the hardest hit sub-sectors from Q1 regained some of their losses partly due to the substantial fiscal and monetary policy response that backstopped some of the markets. Retail and hotels have been the ‘losers’ or worst affected sectors, while data centres and towers, industrial, residential and self-storage were the ‘winners’ or least affected.
Parsons says: “Going into Covid, we had about 50 per cent of the portfolio in the ‘winners’ segment of the market and only about 11 per cent in the ‘losers’ segment, so we were well positioned.”