Schroders is building up its in-house expertise in listed real estate and has taken over the management of a number of funds.
Fund managers Tom Walker and Hugo Machin are joining the company from AMP Capital and will lead the new global property securities team.
The move has enabled Schroders to bring in-house three listed property funds previously managed in partnership with EII Capital Management.
It has also coincides with the announcement that Schroders will take over the management of Investors in Global Real Estate (IGRE), a fund that was being managed by CBRE Clarion Securities.
Subject to shareholder approval, the fund will be renamed Schroder Global Real Estate Securities. IGRE chairman Crispian Collins said: “The board has undertaken a detailed strategic review and, following a competitive process, selected Schroders as the new manager.”
Schroders’ in-house management team will also assume responsibility for the Schroder Global Property Securities Fund, the Schroder Global Property Income Maximiser Fund and Schroder ISF Global Property Securities.
EII Capital Management will no longer manage the funds, although it will continue to manage a number of segregated mandates on behalf of clients of Schroders.
Both companies had “grown substantially” over the nine years in which they had worked together on the funds, according to EII CEO Christian Lange. “We understand the strategic decision to bring the investment management of the real estate securities funds in-house,” he said.
The new property securities team and Schroders’ existing non-listed multi-manager team will report into Neil Turner, head of indirect property investment. Ben Forster will transfer from the multi-manager team to join the securities team.
The moves will see both teams working closely together and “swapping ideas”, Turner told IP Real Estate.
Turner said listed real estate had been identified as a strategically important area of the business for Schroders, particularly given the growth of defined contribution (DC) pension schemes, which typically need greater liquidity when investing.
“We have wanted to combine the different conduits of investing in real estate,” he said. “Increasingly investors are seeing the benefits of holding global property securities as a long-term proxy for real estate but with some enhanced liquidity.”
He added: “For various reasons that is going to be more important, particularly as we look to a DC world more than even before.”
Last year, the National Employment Savings Trust (NEST), a newly created national DC pension scheme, announced it would be investing in direct property and global listed real estate through a hybrid vehicle managed by Legal & General.
Turner said he hoped to see new “products and innovation” arising from Schroders’ listed and multi-manager teams over the medium term, but said there was “nothing imminent”.
