Kames Capital has launched a fund that will help pension schemes track the commercial property market.
The Kames Active Beta Property Fund will invest in open-ended funds with the aim of matching the return generated by the AREF/IPD UK All Balanced Property Funds Index.
The fund will be managed by Tony Yu and Kames’ head of indirect property Mark Bunney.
Kames Capital head of property investment Phil Clark described the new fund as an innovative way to access property returns.
Yu said this is an alternative to investing in one or two funds, which is the way that most small pension funds access the property market.
“However investor returns from some individual balanced property funds have been damaged by redemption issues in recent years, making it difficult for schemes to be confident in the long-term liquidity and performance prospects of a single fund approach,” he added.
“Meanwhile, over the past 10 years, we believe that many multi-manager and fund-of-funds approaches have incorporated too much leverage and esoteric illiquid funds resulting in less liquid and more volatile returns than is desirable for UK schemes seeking a core exposure to the UK commercial property market.”
Yu believes that an actively managed diversified portfolio of open-ended balanced property funds is the key to help deliver returns with a risk profile appropriate for pension schemes seeking property market returns.
Bunney added that there are many routes to investing in property, but due to the unique nature of the asset class, truly passive routes have not existed.
“However we believe that the Kames Active Beta Property Fund offers a unique route for pension schemes to achieve a diversified property market exposure and that our team has the track record to deliver this with the appropriate risk profile.”
The fund will be available through Mobius Life’s institutional investment platform as a tax-efficient life-wrapped fund. Investors will have to pay a 0.24% management charge.
