Following a string of successful launches in 2007, Harewood Solutions, through Harewood Structured Investment PCC Limited, is launching an Enhanced Property Recovery Fund, giving investors the opportunity to benefit from a potential recovery in UK and European property shares.
The fund will provide a minimum return at maturity of 170 % (9.25% IRR) over its six year term assuming the European Public Real Estate Index (EPRA) closes at or above its launch date level. Investors will also benefit from an enhanced timing mechanism which calculates the performance of the index from the lowest point reached in the first two years. The NAV of the fund is 100% collateralised with AAA G7 Government Bonds.
EPRA is a market capitalisation weighted index, designed to reflect the stock market performance of European Real Estate stocks. The Index comprises 97 constituents across 15 European countries. Following the market downturn, the EPRA has fallen approximately 40% since its March 2007 high.
“Investors are increasingly keen to find new ways to diversify their portfolio. At the same time they want to exploit opportunities that arise from market volatility. Our Enhanced Property fund fulfils both these requirements.” says Stephane Goursat, head of Structured Product Sales UK and Northern Europe, BNP Paribas.
“Not only does this Fund provide the opportunity to benefit from reduced property valuations, it allows for investors’ returns to be further enhanced by setting the starting ‘price’ only after the lowest Index value for the first two years has been established,” adds Ryan Rogowski of Harewood Solutions.
The subscription period runs from 26 February to 8 March 2008. The fund is expected to be quoted on the London Stock Exchange. Winterflood Securities are acting as placing agent and market maker.