Henderson Global Investors has announced the Q4 2007 launch of the Henderson Asia Pacific Indirect Property Fund (Pagoda), a fund with both open- and closed-ended sub-funds aimed at institutional investors globally.
Pagoda is one of the first funds of its kind to offer an indirect property fund investing in direct Asian property funds. It has a primary target total return of 12% p.a. with a secondary target income return of 4% p.a. and aims to exceed US $1 billion of assets under management. The fund is a Luxembourg Fonds Commun de Placement (FCP) with US dollar and Euro denominated sub-funds.
Investors will have exposure to a large pool of underlying property assets which are diversified by countries, sectors and market cycles. The Fund will target primary investment opportunities mainly in Australia, Japan, New Zealand, Singapore, Hong Kong, India, China, Vietnam, South Korea, Malaysia, Indonesia, Thailand, Philippines and Taiwan.
Pagoda will be run by Henderson's property team, who manage over US $17.8 billion property assets. Henderson has over 180 professionals located in key markets worldwide with a research team that monitors and forecasts more than 800 local markets across all the major international property markets, and across a range of products, sectors and services.
Commenting on the market opportunity, Chris Reilly, Head of Henderson Property in Asia, says, "Asia is a region that is experiencing a sustained period of economic growth. With over 3.5 billion people, the area contains more than half of the world's population of the 100 most populous cities in the world, 64 are in Asia. Asia also has a highly educated and skillful workforce. Despite this, the Asian property market remains relatively immature and it is this dynamic that provides a wealth of property investment opportunities."
The forecasted direct property returns for the region reflect Henderson's belief that the Asian commercial property sector will continue to expand rapidly over the next five to ten years due to ongoing economic integration, the continued expansion of real estate capital markets, a rapid pace of urbanization and increased cross-border activity. Other factors driving this growth include the deregulation of currency and capital markets, increasing capital flows to property, and the desire for many corporates to remove property from their balance sheets.
On the fund structure, David Hemmings, Head of Henderson Property's Fund of Funds business, adds, "A fund of funds is an efficient vehicle by which institutional investors, both large and small, can access a large and diverse pool of direct property assets managed by an experienced team of property professionals. Unlike direct investments, that incur higher transaction costs and are labour intensive, a fund of funds allows smaller capital outlays and provides liquidity with low transaction costs."
In December 2005 Henderson launched the first open-ended European fund of property funds (the Henderson Indirect Property Fund), raising €600 million in the first 16 months. To date the fund has invested €500 million across 16 underlying funds covering all sectors and markets in continental, central and eastern Europe. In the year to June 2007 it has achieved a total return of 16.9%.
Henderson manages over 35 property funds and mandates for over 200 clients and as of December 2006, 98% of all Henderson funds had outperformed their benchmark over the previous three years.
Source: FD Tamesis