UK – The London Borough of Hounslow Pension Fund has outsourced its real estate investments by allocating to two pooled funds managed by Threadneedle Investments and CBRE Global Investors, respectively.
The £690m (€816m) local authority pension scheme decided to move from an internally managed property portfolio to “diversify” and “increase our resilience without reducing our performance or taking on additional risk”, according to Hounslow’s annual report.
The pension fund has committed £20m to Threadneedle’s TPEN Property Fund and the balance of its 5% property allocation to the CBRE Lionbrook Property Fund.
The funds were chosen for their individual strategies, but both vehicles will provide exposure to investments outside the prime segment of the UK market.
Lorelei Watson, head of treasury, pensions and capital at Hounslow, said the pension fund “liked Threadneedle’s active approach to property management and the emphasis it puts on stock picking, risk management and income yield”.
She added: “Instead of chasing trophy assets, its investment experts look across sectors and regions to find properties with strong fundamentals and attractive yields.”
Watson said CBRE Global Investors’ fund was attractive because of its “balance between high-quality real estate” and its “pipeline of added-value asset management projects”.
She added: “These, combined with a clear house approach towards cash-flow management and income outperformance, made Lionbrook a complementary choice for our investment strategy.”