Clavis Walden paifs the way with new structure

UK - Clavis Walden has become the first fund manager to launch a property authorised investment fund (PAIF), an open-ended fund structure offering pension funds the same UK tax benefits as a real estate investment trust (REIT).

Investors in the Piccadilly UK Commercial Property Income Fund will be able to receive dividends from rental income without having to pay corporation tax.

A number of fund managers, including Threadneedle Property, have said they are aiming to launch or convert existing funds as PAIFs.

"The property fund management industry is changing and we believe PAIFs will become the structure of choice for many managers," said Iain Keys, managing director at Clavis Walden.

"We believe the fund will meet demand from clients looking for income in a tax efficient manner from an on-shore fund which a PAIF provides," he added.

The Clavis Walden vehicle is targeting a net distribution of 7% per annum and an optimum fund size of £400m (€456.5m) for the PAIF.

The vehicle will invest in direct UK commercial properties, with 10% invested in REITs, property company shares and other liquid assets, to maintain liquidity.

The fund manager is targeting lot sizes of between £2m and £6m initially, above the majority of private investors and below most current institutional activity.

First Property Group is following a similar strategy with its new UK fund, suggesting more fund managers might target this middle ground.

Clavis Walden will primarily look to raise capital from UK and overseas institutional and professional/discretionary investors, including multi-managers, wealth managers, private client managers, pension funds and charities.

"When combining a new tax-efficient structure with the market's price correction seen over the last two years, an opportunity has been created to invest in the market at attractive pricing levels," said Keys said.

"Low gilt rates and a significant outward yield shift across the wider commercial property market has resulted in the recent re-emergence of a significant positive yield gap."

He continued: "This presents an exciting investment opportunity as the market returns to its fundamentals, offering strong income characteristics and potential for capital growth as the economy starts to recover."
Clavis Walden paifs the way with new structure

UK - Clavis Walden has become the first fund manager to launch a property authorised investment fund (PAIF), an open-ended fund structure offering pension funds the same UK tax benefits as a real estate investment trust (REIT).

Investors in the Piccadilly UK Commercial Property Income Fund will be able to receive dividends from rental income without having to pay corporation tax.

A number of fund managers, including Threadneedle Property, have said they are aiming to launch or convert existing funds as PAIFs.

"The property fund management industry is changing and we believe PAIFs will become the structure of choice for many managers," said Iain Keys, managing director at Clavis Walden.

"We believe the fund will meet demand from clients looking for income in a tax efficient manner from an on-shore fund which a PAIF provides," he added.

The Clavis Walden vehicle is targeting a net distribution of 7% per annum and an optimum fund size of £400m (€456.5m) for the PAIF.

The vehicle will invest in direct UK commercial properties, with 10% invested in REITs, property company shares and other liquid assets, to maintain liquidity.

The fund manager is targeting lot sizes of between £2m and £6m initially, above the majority of private investors and below most current institutional activity.

First Property Group is following a similar strategy with its new UK fund, suggesting more fund managers might target this middle ground.

Clavis Walden will primarily look to raise capital from UK and overseas institutional and professional/discretionary investors, including multi-managers, wealth managers, private client managers, pension funds and charities.

"When combining a new tax-efficient structure with the market's price correction seen over the last two years, an opportunity has been created to invest in the market at attractive pricing levels," said Keys said.

"Low gilt rates and a significant outward yield shift across the wider commercial property market has resulted in the recent re-emergence of a significant positive yield gap."

He continued: "This presents an exciting investment opportunity as the market returns to its fundamentals, offering strong income characteristics and potential for capital growth as the economy starts to recover."