Case Studies

Indirect portfolio

Investment Type

Indirect

Sector

Other

Acquisition Date

January 2006

Acquisition Value

£139m

Description

A fund of funds vehicle subject to quarterly subscriptions and redemptions, aiming to provide liquid property exposure.
Investment rationale

We built a portfolio of 10 balanced and sector specialist funds providing a diversified market exposure. 60% of the fund is invested into open-ended investments for liquidity purposes.

Execution

We invested in the best quality diversified open-ended funds to provide liquidity.

We invested with “best in class” managers in closed ended sector specialist funds to gain exposure to specialist management expertise and make strategic sector level allocations.

10% of the fund was invested into REITs at the end of 2013 as we recognised that we were at the beginning of a recovery period and expected REITs to outperform unlisted property. REITs have provided a performance boost to counteract the high transaction costs incurred in a fund of funds vehicle.

Outcome

Quarterly subscribed capital invested promptly to limit cash drag on fund performance.

Quarterly redemptions paid out on time throughout the property cycle.

Long tem, consistent (5 year, 3 year and 1 year) outperformance against the IPD All Pooled Funds Index despite managing a quarterly liquidity window.

Past Performance is not a guide to the future. The value of an investment may go down as well as up and future returns are not guaranteed.