Sarasin issues first sustainable real estate equities fund

Swiss bank Sarasin is issuing the world's first fund to specialise in the shares of sustainable property companies, the Sarasin Sustainable Equity Real Estate Global Fund. The bank said that the companies included in the portfolio are pioneers in the sustainable construction and management of properties.

Sarasin Sustainable Equity Real Estate Global, was launched on 10 July 2009. The fund is the consequence of the repositioning of the former Sarasin Real Estate Equity - IIID (EUR). Taking into consideration environmental and social criteria, the fund invests worldwide in a broad spread of listed companies active in real estate and in Real Estate Investment Trusts (REITS).

'Of all the sectors, real estate has the biggest potential for reducing energy consumption and preventing greenhouse gas emissions. The property sector therefore has a key role to play in combatting climate change,' explains Klaus Kaempf, Sustainablilty Research.

Jakes Ferguson, the Fund Manager who conceived the new fund comments: 'We have looked at sustainability in global real estate for over 12 months, and find this issue right at the top of the agenda for many Western REITs and property companies. We are sure that sustainability will continue to grow in importance in Asia.'

Sustainability makes a positive contribution to the fund's performance. In this way tenants recognise the advantages of sustainable building methods, as reflected in fewer unoccupied buildings and wider acceptance of higher rents in return for lower running costs. On the property market, sustainable buildings fetch higher prices.

The risks associated with the fund involve price fluctuations mainly in response to company-specific developments as well as changes in the economic and interest rate environment. There is also an exchange-rate risk if the investor’s subscription currency is not the same as the fund's investment currency (or currencies).

Sarasin claims to be market leader among Switzerland's sustainable asset managers, with a market share of 21%. Over the past 10 years, the volume of assets that Sarasin manages according to sustainable principles has soared from CHF 626 mln (EUR 412 mln) to CHF 6.5 bn by the end of 2008.