Principal goes global with property securities
Principal Global Investors (PGI) has officially launched a new fund that will give investors access to property securities in three of the world’s main geographical regions.
Lead portfolio manager for the fund, Kelly Rush, said: “For us, it was a very natural extension to offer this because we were already essentially covering about two-thirds of the world anyway, and we’re able to do so by taking the team that already had a working relationship and just broadening our mandate and creating a formal product that we jointly will manage.”
Investing in each region will be managed by three separate portfolio managers, with Rush in charge of North America, Chris Lepherd responsible for Asia Pacific, and Simon Hedger looking after Europe.
“We’ve elected to spend our risk budget dollars on those things that we’ve proven ourselves to be good at, and that’s within regions getting country weightings right. In addition to that, we’ve also proven ourselves to be quite good at getting security selections right and knowing which stocks to have big overweighting to and which to have big under-weightings to,” Rush said.
“We’re not spending a lot of time judging the merits of being overweight US versus overweight Europe, as it would rob us of valuable time that we could otherwise be spending on our focused universe … so the way we are going to allocate the monies is the way our benchmark is allocated. What that means is roughly half to the US, roughly a third to Asia Pacific, and the balance of about 20 per cent to Europe,” he explained.
The fund’s benchmark is the FTSE-EPRA-MEREIT Global Real Estate Index, which was chosen due to the breadth of its definition and the number of constituents included in it.
“We like that because we think the broader the universe the better chance to find opportunities to generate excess returns or alpha for our clients,” Rush said.
The fund has been aimed at retail investors who are looking to invest in global property and global real estate investment trusts, but PGI believes in time it will also attract investments from institutional participants in the market.
PGI is currently having the offering assessed by the various research houses, with a view to having it included on most of the major investment platforms very shortly.
Recommended for you
Outflows have doubled in the property and infrastructure space to $1.3 billion with advisers instead favouring private markets as Morningstar data finds active property funds are struggling to outperform.
Fund manager HMC Capital is seeking to expand fundraising for its private equity vehicle into wholesale platforms now that it has achieved a three-year track record, while scrapping plans for a second fund.
Former Platinum co-founder James Simpson will take up a non-executive role at Income Asset Management as two directors retire.
Bell Financial Group has announced a 44 per cent decline in half-year net profit after tax but record funds under advice as it transitions into a diverse wealth management business.
