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Achieving temporary sector exposure adjustment through an indirect investment

Meeting short term client rebalancing requirements

Investment Type

Indirect

Sector

Office

Acquisition Date

June 2012

Acquisition Value

£2.8m

Description

An actively managed Central London office fund with a portfolio worth over £1bn at the time of investment employing modest gearing of under 20%.

Investment rationale

At the time of purchase our client had no office exposure in Central London, a sector which we strongly believed was about to outperform the wider market. We bought units in the fund at a 7% discount to Net Asset Value (NAV) on the secondary market in order to provide access to the central London office sector until suitable office assets could be identified for purchase. Once we had built up the client’s direct London office portfolio, we disposed of the investment in the fund.

Execution

Through DTZ Investors’ strong secondary market broker contacts we were able to source units for our client at an attractive discount to their NAV (7%). We submitted a redemption request in Q2 2014 and received our client’s capital back in March 2015.

Outcome

Exposure to the Central London office market was achieved over a period when it outperformed All Property by over 5% p.a.

The investment was successfully exited as the client’s direct Central London office portfolio reached its target size.

IRR

21.6%

Date liquidated

March 2015

Sales proceeds

£4.8m

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.