REAL ESTATE - Henderson Global Investors has launched what it says is Europe’s first property fund of funds.
The Indirect Property Fund Europe will invest in “eight or nine” funds across sub-sectors and geographical locations.
The fund manager opted for the fund-of-funds because it allows investment in various structures. It expects the fund to attract investors from European countries with different tax and reporting requirements. In addition, because the fund is open-ended, it offers opportunities to those investors without the resources to invest directly.
Spokesman Richard Acworth said: “We have a huge amount of optimism in the structure.”
Despite the increasing popularity of fund-of-funds in recent years, the development of an open-ended real estate fund has been a protracted process. Until relatively recently, information on funds across Europe was often scarce and acquiring adequate information still depends, according to Acworth, on local teams that understand market conditions.
Critics of fund-of-funds have attacked fees that are well above those charged by regular fund managers because they layer both the fund’s own fee and charges on the underlying funds. Yet Acworth claims the fund’s fees are “cheap for the level of information on offer”. As a result, he predicts other managers will set them up.
One option would be the creation of a more “extreme, opportunistic” version of the fund. But Acworth said: “It’s not on the agenda. We prefer to concentrate on this fund now we’ve set it up.”