RLAM converts property fund to PAIF structure
8 June 2010
Royal London Asset Management (RLAM) has converted its Royal London Exempt Property Unit Trust (RLEPUT) to a Property Authorised Investment Fund (PAIF) structure in a move to attract a broader range of investors including multi managers and wealth managers. Corporate clients, such as insurance companies, will also be able to invest through a feeder fund, the Royal London Property Trust.
This is the first time an existing property fund has been converted to a PAIF since these vehicles were introduced by the FSA in 2008. Importantly, this means that investors will have immediate access to pool of diversified property assets.
By broadening the appeal of the fund and attracting potential new investors, an increase in the fund’s size will allow the team to take advantage of larger investment opportunities. In addition, as the fund is now an open-ended investment company (OEIC) it has access to a wider range of non-physical property assets including REITs, ETFs and other collective investment vehicles, helping to enhance diversification.
The investment objective and policy of the PAIF remain similar to the RLEPUT, investing in a broad spread of commercial properties across the UK. The fund therefore maintains its existing track record. Performance has been very strong, with the fund consistently ahead of the sector average for balanced property unit trusts. Over one year it has returned 14.3% against a peer group average of 10.9% and year to date is up 5.8% against 4.9% for the sector average (source: IPD UK Pooled Property Fund Indices to 31 March 2010).
Throughout the conversion, RLAM has been advised by law firm, Eversheds LLP. RBS will continue in their role as Depository for the fund.
Susan Spiller, RLAM’s Head of Marketing said,
“The conversion to a PAIF structure is an important step in the development of our property capabilities and reaction from existing clients has been very positive. Significantly, we can now market our excellent reputation for property investment to a broader group of investors who will benefit from the greater investment opportunities open to the management team.”
Fund Manager, Stephen Elliott, added,
“We are convinced of the benefits of active fund management and the potential to add value for our investors, particularly against the current backdrop of market volatility. The broader appeal of our fund as a PAIF is an exciting development for us and we look forward to demonstrating the success of our philosophy and process to a greater number of potential investors.”
– ENDS –
For further information:
RLAM Stephen Watchorn
Tel: 020 7506 6582
Quill PR
Jo Stonier
Tel: 020 7758 2230
Editor’s notes
The conversion took place on Friday 28th May 2010.
Fund facts (to 28th May 2010)
|
Fund name |
Royal London Property Fund |
|
Fund type |
Property Authorised Investment Fund (PAIF) and a Non UCITS Retail Scheme (NURS) |
|
Benchmark |
Investment Property Databank (IPD) Pooled Property Fund Index (PPFI) of Balanced Property Funds |
|
Fund composition |
A broad mix of UK commercial property assets |
|
Minimum investment |
£100,000 |
|
Fund Manager |
Stephen Elliott |
|
Share types |
Accumulation (A), Income (B) |
|
Feeder fund |
Royal London Property Trust: for all corporate investors |
|
Pricing |
Monthly on last business day |
|
Subscriptions |
Monthly on 7th business day |
|
Redemptions |
Monthly on 7th business day (subject to a three month notice period and one month deferral if required) |
|
Income distributions |
Monthly |
|
AMC |
0.75% |
|
Performance fee |
Based on comparison to ranking with the benchmark index: -0.10 for 4th quartile; 0.0% of 3rd quartile; +0.1% of 2nd quartile and +0.3% for top quartile |
|
Fund size |
£188m |
|
Number of assets |
41 |
|
Initial yield |
6.3% |
RLAM’s 11 strong property team currently manages £2.3bn of property assets, spread across the UK commercial property market. In 2010, the property component of the Royal London Long Term Fund won the IPD/IPF Property Investment Awards for the third time in five years. The fund, which is managed by Royal London Asset Management (RLAM), was named category winner in the Insurance Company Life Funds (above £1bn) category.
Royal London Asset Management (RLAM) was established in 1988 and specialises in providing investment management solutions for both the Royal London Group and a range of external institutions. These include FTSE 250 companies, local authorities, universities, charities, wealth managers, financial advisers and private clients. RLAM manages over £37bn of assets, employing more than 50 experienced investment professionals in our London based office.
Royal London Group, is a specialist financial service provider. Its businesses focus on those sectors of the market which value quality propositions, operating through a number of brands:
- Scottish Life – UK pensions market
- Bright Grey – UK protection market
- Scottish Provident – UK protection market
- Royal London 360° – offshore investment markets
- RLAM – fund management
- RLCM – specialist cash and liquidity management for UK onshore clients
- RLAM C.I. – specialist cash and liquidity management for offshore clients
- RLAS – life and pensions administration
- Fundsdirect / Ascentric – funds supermarket; Wrap platform
Royal London also distributes life and pensions products through Santander’s UK branch networks.
Royal London is the largest mutual life and pensions company in the UK with Group funds under management of £39.1 billion. Group businesses serve around 3.4 million customers and employ 2,890 people. Figures quoted are as at 31 March 2010.
Source: rlam as at 7 June 2010, unless otherwise stated.