Description

The diversified and ungeared fund is one of the largest on the IPD All Property Fund Index with a prime portfolio worth over £3bn.

Investment rationale

Our client decided to upweight to property and allocated DTZ Investors £50m of capital to invest into direct property. At the time property was delivering a return far in excess of cash and so we invested £20m of the available funds into the fund to provide immediate exposure to the market whilst direct assets were sourced. The fund was chosen because its prime diversified and ungeared portfolio represented low investment risk and because it has proven to be the most liquid unlisted property fund over time, giving us greater control around exit timing.

Execution

Over the course of a month we were able to secure several trades on the secondary market to invest all of the target £20m lot size. We bought in at an average price of just under 1% premium to the latest Net Asset Value (NAV). Once the team were ready to invest the capital into direct stock, we sold the investment down in two stages in September 2014 and January 2015, again, at a small premium to the latest NAV.

Outcome

Immediate exposure to the property market whilst direct property assets were sourced for acquisition.

Negligible round trip transaction cost.

IRR

15.7%

Date liquidated

January 2015

Sales proceeds

£23m

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.