According to the announcement, the AEGON Active Value Property Fund aims to provide pension fund investors with attractive returns through the active management of a portfolio of direct UK property investments.
The fund, managed by David Wise and Helen Batten, will target properties in the GBP3 to GBP10 million size range, an area that AEGON says is largely ignored by many funds, and look to build a balanced portfolio of property from across the UK. The fund is targeted at investment professionals and is suitable for defined benefit and defined contribution pension schemes, according to the announcement.
In a press release announcing the launch, AEGON Asset Management says it believes income will be a major factor for property returns over the medium term and it believes that by combining income with its property team’s recognized stock-picking and asset management skills, it will be able to produce attractive returns for longer term investors.
The AEGON Active Value Property Fund will have no gearing, except in the short term for bridging sales or purchases and will not have any indirect holdings, according to the firm. It will have an initial projected yield of 7%, although all income derived from its investments will be reinvested. The fund will aim to outperform the IPD/Association of Real Asset Funds All Balanced Funds Index, which includes many higher risk funds that utilise gearing and indirect property, by 0.5% on a rolling three-year basis.
Additionally, AEGON notes that the fund will have a broad sector allocation, investing in the main commercial property areas of offices, industrial and retail, including high street and warehouse units. But it may also consider leisure, healthcare, residential and student accommodation.
The fund will use a combination of top-down and bottom up in its investment approach, and will focus on Wise’s ability to source good quality asset management stock, often off market and Batten’s skills at the management of the assets, according to the firm. Batten and Wise have over 30 years property experience and will be supported by the wider AEGON Asset Management’s 12-strong property team.
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