Henderson Global Investors (Henderson) and Aviva Investors today announce that Aviva Investors will become the investment manager and 'Authorized Corporate Director'(ACD) of the Henderson International Property Fund (the Fund) with effect from 2 August 2010.
The agreement follows a review by Henderson of the Henderson International Property Fund's long-term strategy which determined that, in order to remain effective over the longer term, the Fund needed to increase in both size and regional diversification. The Fund was unlikely to achieve this organically at the rate necessary to take best advantage of favourable market conditions. Therefore, it was decided, in the best interest of investors, to combine the Fund with another fund or funds with similar investment objectives and holdings.
After a detailed analysis of suitable property vehicles currently available in the market, Henderson entered into negotiations with Aviva Investors that have resulted in today's announcement. Aviva Investors has a well-regarded global real estate capability, with dedicated teams in London, Paris, Frankfurt, Singapore and Melbourne and significant experience in managing direct investment property funds.
Following transition, Aviva Investors proposes to combine the assets of the £183 million* (218.6 mln.) Henderson International Property Fund with the £223 million* held in its existing European and Asia-Pacific real estate funds (subject to investor and regulatory approvals). By significantly increasing the size of the funds, we expect clients to gain the immediate benefit of a strengthened investment proposition.
Commenting on the announcement, Ian Womack, Chief Executive Real Estate at Aviva Investors, says, "The fund structures are well aligned and by combining the European and Asian assets, clients should benefit from greater diversification and scale, as well as the specialist on-the-ground management focus of our regional property teams
"The resulting funds will provide an excellent platform for investment exposure to the Asian and continental European commercial property markets. They should also prove attractive to new investors, increasing the potential for further growth in scale and diversification. We believe that the transfer and combination of the funds provides investors with the best possible outcome."
Mark Carpenter, Director of UK Property Retail Funds at Henderson, said: "We believed at the time of re-opening the Fund on 12 February this year that the outlook for international commercial property was encouraging. In the months since re-opening, the improving environment for international property has already led to upward revaluations for the direct property portfolio of the Fund, a trend that we expect to continue. We therefore believe that the positive long-term outlook for the market presents an opportunity for investors in the Fund.
"However, for the fund to maximise returns over the longer term, greater regional diversification and scale are major prerequisites. Unfortunately, despite the wealth of experience and expertise of the Henderson property business, we do not have other international property funds, suitable for retail investors, which could be merged with the Fund. We therefore believe that transferring the Henderson International Property Fund to Aviva Investors is in the best long-term interests of investors."
This announcement does not affect the management of the £832 million** Henderson UK Property Unit Trust which has a well diversified portfolio across 52 properties and 118 tenants and continues to attract meaningful inflows.
* All fund sizes as at 30June 2010 at quoted bid or NAV.
** As at 31 May 2010