New boutique targets property

A new boutique property manager will be exploiting the weaker local real estate market to deliver returns for investors.

Amici Funds Management has been formed by former SAI head of property Graham Brewer and private banking specialist Kaye Martin.

“There is an opportunity for strategic and timely acquisitions of well-known and significant commercial buildings in major markets around Australia,” Brewer said.

“These present increasingly attractive buying potential and come at a time when the (commercial real estate) market is re-pricing due to poor economic performance.”

Brewer said the new Melbourne-based manager was going to invest in existing properties and avoid development.

“It is back to basics for this business, with reasonable gearing levels and no development risk,” he said.

“We are focusing on the distribution yields for investors and not just growing funds under management.”

Although the fund manager has not launched any funds as yet, it will be opening an unlisted, open-ended property fund with a loan to value ratio (LVR) of about 50 per cent of capital reserves.

It will invest in properties to give tenant, sector and geographical diversity, Brewer said.

Martin said to win investors back to the real estate funds management sector managers would need to demonstrate conservatism and good returns.

“The imperative for us is to maintain a discipline of conservatism with low gearing, modest but tax effective distributions and potential capital growth,” she said.

“If we do this we will be in the position to deliver investment performance to clients compared to the past experience of other managers who have got it so wrong in recent times.”

Brewer admits the reputation of the two directors will be on the line, which is an incentive to deliver sustainable returns to investors.

“We want to deliver solid returns and sustainable distributions to investors in the two new funds,” he said.

“Now is the right time to do that with property values falling and our ability to take advantage of the property cycle to invest.”

Amici is assembling its team and has already gained all the necessary Australian Financial Services Licences from the Australian Securities and Investments Commission.

Brewer said some support services, such as compliance and IT communications, will be outsourced to enable the team to focus on property acquisition and management.