Following the oversubscribed launch of the Insight Foundation Property Trust in July, Insight Investment is moving into indirect property investment market by launching a property fund of funds in October. This builds on Insight’s established fund of funds capability, extending its existing range of conventional and private equity fund of funds.
The Insight Property Portfolio Fund has been designed to provide investors with exposure to the UK commercial property market through a fund of funds approach. This new investment opportunity will be an open-ended, Guernsey unit trust. The fund will target capital growth through a well diversified portfolio, it is expected to have a target distribution yield of 4.5% and aims to achieve returns ahead of recognised property market indices.
A fund of funds approach allows the investment manager to pick funds which are best in class. Property fund of funds investors have the further benefit of achieving exposure to specialist property funds that might otherwise be unavailable. The Insight Property Portfolio Fund will own holdings in 10 individual property funds which together hold assets with a total combined value of over £5bn.
A conditional agreement secures a right for the Fund to acquire interests in an existing portfolio of offshore property unit trusts. This means that from the launch, it will be fully invested in a diverse portfolio of property funds. This will reduce any dilution of property returns that would arise where cash inflows are not invested immediately.
The underlying portfolio of funds will span all the main sectors and will be actively managed by the 46 strong Insight property team, who now manage around £5 billion of property assets. The planned launch of this fund of funds builds on Insight’s growing investment capability and reputation as a major property fund manager in the UK commercial market.
Commenting on the initiative, Duncan Owen managing director of Insight’s property business, said “This fund offers a strong combination of high quality investments, enormous diversity and active fund management.
“Commercial property is increasingly in demand and offers investors the potential to diversify their portfolios. What differentiates the Insight Property Portfolio Fund is the great combination of an efficient structure and a wide range of funds, some of which are hard to gain access to. We expect it to have a wide appeal.”
Gary Mairs, deputy chief executive, Insight Investment added “This launch underlines Insight’s determination to be at the forefront of fund of fund product development and complements our strengths in conventional fund of funds and private equity fund of funds.”
HSBC Bank plc, acting through its Global Investment Banking division, is placing agent for the fund.
Insight will not be marketing this fund to private investors in the UK. The minimum subscription is £100,000.