St George-owned pooled development fund Ascalon Capital Managers has added Fortuna Funds Management to its stable of boutique funds managers, agreeing to purchase an equity stake of up to 37 per cent in the start-up residential property investment business.
Ascalon chief executive Ray De Lucia said his team has spent the past 12 months researching Fortuna, which is the responsible entity for the Residential Property Trust of Australia that will be launched in February 2006.
De Lucia said Fortuna is Australia’s first managed investment company to take a structured portfolio management approach to investing in residential property.
“There have been a number of try-ons with property investment in the past. They’ve generally failed largely because the motives were different. Some of them have been land developers that wanted to secure a means by which they could secure their land bank,” De Lucia said.
He said another problem with direct residential property investment in the past has been a requirement for investors to allocate large sums to one property.
“What they’ll have with Fortuna is the ability to invest as little as $1,000 and get a diverse portfolio of residential property,” he said.
De Lucia said Ascalon would progressively inject capital into Fortuna over a three-year period via a series of equity tranches, and would provide close support on all aspects of the business.
“We get involved with all our boutiques. That’s always been the case. We try and help them. We don’t tell them what to do, but we certainly provide some sort of background and support structure,” he said.
De Lucia will sit on Fortuna’s board of directors, along with Peter Andrews and former Federal Treasurer John Dawkins, who will act as chairman.
Fortuna managing director Brett Davies and executive director Brett Whitford, who established Fortuna in April 2003, will also sit on the company’s board.
