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Equiti Funds Management has launched its first direct property fund amid signs the commercial property market has started to bottom, according to Equiti executive director Darren Wise.
The Equity Diversified Property Fund offers investors, many of whom have deserted commercial property as an asset class, relief from the potential problems associated with existing unlisted property fund structures, Wise said.
He said the new fund has direct exposure to quality commercial properties and a built-in and mandated exit strategy.
Wise believes an exit strategy is a prerequisite for any good investment and he said many unlisted property funds fail this key test.
“Our focus, when structuring the fund, was to provide investors with a simple and transparent investment opportunity coupled with a definite exit strategy,” Wise said.
The hybrid structure of the Equiti Diversified Property Fund would see it open for three years from the date of issue for capital raising and asset acquisition followed by a four-year period when the fund would be closed, subsequently, the fund would be wound up, the portfolio liquidated and the funds returned to investors.
Equity said the three-year open period of the fund would ensure performance was not anchored to a single asset, which it said is often the principal risk in a single property syndication structure.
The fund’s management team includes Wise, Peter Bobbin (Argyle Lawyers), Richard Arnold (Arnold & Co Accountants) and Michael Este (LMW Invest).
Equiti has chosen an external responsible entity, LMWI Managed Investments, which it said provides an additional compliance oversight.
