Icamap, the Luxembourg fund manager founded by Unibail Rodamco’s former CEO Guillaume Poitrinal, JP Morgan’s former analyst Harm Meijer and Alexandre Aquien, has announced the launch of a new opportunistic fund designed to benefit ‘from the current exciting market conditions for listed real estate stocks in Europe’.
The open-ended vehicle, known as Icamax, has an initial equity target of €200 mln and will focus on stocks trading at a significant discount to net asset value.
‘A selection of companies is trading at high yields and unjustifiably large discounts to their net asset value of up to 60%. This despite transactions in the direct market occurring at or above book value,’ Icamap said, commenting on the fund’s investment strategy.
Icamax will include a limited number of holdings, carefully selected from the large under-researched universe of circa 500 property stocks. The portfolio will be managed in a high conviction style under the direction of Harm Meijer and Guillaume Poitrinal.
‘This is an unprecedented crisis and while there are indeed short-term headwinds from lockdowns and the ensuing economic impact of Covid-19, we have the conviction that we are in a phase of high disconnection in the listed real estate universe between intrinsic values and property stock prices, which is opening a window of opportunities for investors. Icamap has the knowledge, experience and capabilities to identify the winners in this environment,’ said Meijer and Poitrinal.
Meijer has already expressed his fears regarding the direction taken by some property stocks and warning of potential covenant breaches. In an online post to contacts, he wrote in September ‘I sound the alarm! I think it would be wise if more policy makers, especially in the UK, look at what property stocks are implying today: generally speaking, property values could fall up to 20-30% for malls and offices, resulting in potential covenant breaches.’
‘Who are the major investors in this space? Pension funds, insurance companies, ordinary people on the street…banks will soon become owners if we are not careful...If policy makers continue to put pressure on this sector and cannot come up with any relief I fear these declines could happen (less so for prime) and result in a domino effect impacting pensions and banks.'
