Russell Investment Group has appointed Perennial Investment Partners to run a portion of both its domestic and international property funds on the strength of the manager’s absolute return approach to investing and the global network it has in place.
Under the new mandates Perennial will manage 37.5 per cent of the Russell Australian Properties Securities Fund (RAPSF) and 20 per cent of the Russell International Properties Fund (RIPSF).
“We have high regard for Perennial Real Estate’s skills and confidence in the team’s ability to add value,” Russell head of property Asia Pacific Sally Haskins said.
She explained the awarding of the two mandates to Perennial was indicative of the global nature of the listed property trust (LPT) market and the ability of the manager to service this perspective due to its presence in numerous locations around the world.
“The impact of offshore trusts on the sector is significant with over 40 per cent of the sector invested in global assets. Consequently, it is very beneficial to have on-the-ground teams managing the LPTs,” Haskins said.
She added the appointed reflected investors’ demand for absolute return investment strategies.
In relation to the domestic property fund, Perennial has replaced Macquarie Investment Management and will take its place alongside SG Hiscock and JBWere in managing the $639 million of funds already accumulated in the product.
On the $946 million strong RIPSF, Perennial will join incumbent managers AEW, Invesco, and Morgan Stanley.
“The regional structure has maintained country-specific bets within narrow ranges. But now with Perennial sitting atop the fund, country and stock bets can both be used to add considerable value,” Haskins said.
Furthermore, she pointed out the diversification value of Perennial due to its low level of correlation with the other managers on the fund stemming from its total value strategy.
“Perennial has a global universe of stocks to consider, and because its approach is not benchmark aware, it will add considerable diversification to the portfolio,” Haskins added.
