Bestinvest says
This offshore open ended fund is run by the respected TR Property team. In common with that trust it invests in both direct property and listed securities. Whilst the investment universe of this fund is similar to TR Property, it targets a higher level of income. For reference purposes, the fund will be benchmarked against 50% direct property (IPD) and 50% listed property (EPRA Pan European Index). The fund is not eligible for PEP/ISA investments.
Once the management have achieved their desired exposure to direct property the portfolio will offer a yield of approx. 4.5% p.a. gross of tax and charges. Generally speaking 70% of the portfolio will provide the core income of the company, the balance being more actively managed to achieve capital returns.
As with the existing TR Property Trust the aim of the management team will be to exploit valuation discrepancies between the listed property equity market and the direct commercial market. Whilst the fund will invest directly in UK commercial property, European exposure will be through listed property companies. All euro currency exposure will be hedged back into sterling.
The investment process focuses on a combination of top down and company specific factors. The former includes macro trends and their subsequent impact on sub sectors and local regulatory / planning issues. Analysis at the company level focuses on an evaluation of property portfolio risks in terms of structure and profile. The management team are also entitled to an incentive based on performance relative to this benchmark.