UK – Skandia is adding an institutional share class to its Global Property Securities fund as pension funds are demanding the ability to invest in it.
Ryan Hughes, fund manager at Skandia Investment Managers Limited (SIML), said pension fund demand has so far only come from the UK rather than the wider European pension fund arena, alongside interest from private client banks and discretionary managers.
The £431m (€633.6m) fund, managed by LaSalle Investment Management, will now give investors access to the fund at a lower annual management charge of 75 basis points as well as diversified geographical and sector allocation of Reits.
Acting on behalf of Skandia, LaSalle currently holds approximately 48% of the fund in US listed stocks, while under 15% is in Europe, 13% is held in UK listed securities, 12% is in Asian stocks and the remainder is invested in Australian and Canadian stocks and cash.
Almost half of the fund is invested in the US listed securities such as Reits, said Hughes, because the US market represents approximately half of all securities available in the entire listed global arena - the US market having around 130 Reits on the market, according to Hughes.
LaSalle also seeks out companies which actually own the asset rather than investing in developers of real estate, noted Hughes, because they have better risk-adjusted returns over the long-term compared with property developers.
Once the institutional class is established in the UK, it is likely the fund will be marketed elsewhere as the retail version of the Global Property Securities fund has a dollar-denominated share class, added Hughes.