Legal & General launches Hybrid Property Fund.
12 May 2011
Fund provides Defined Contribution pension schemes with an innovative blend of Global/UK exposure and enhanced liquidity when accessing property returns.
Legal & General Property (“LGP”) together with Legal & General Investment Management (”LGIM”), announce the launch of a new product, the Hybrid Property Fund (the “Fund”), which offers Defined Contribution (“DC”) pension schemes a new and innovative way to invest in property funds while managing volatility and liquidity.
Developed in conjunction with a major investment consultant, who requested an initial exclusivity period on the product until 30 April 2011, the Fund invests in LGP’s UK balanced fund (the Managed Property Fund) and LGIM’s Global REITS Index Tracker Fund on a default position split of 70:30, respectively. As of May 2011 the fund will be available to a number of other DC schemes and has already been selected by a major Life platform to provide its clients with global real estate exposure.
Providing a property allocation that has been specifically designed in conjunction with investment consultants to meet the optimum criteria of UK DC pension schemes, the Fund caters to the increasing long-term growth trend of DC. The combination of UK direct and global indirect funds provides greater diversification and liquidity, while reducing fund expenses and the entry and exit costs typically associated with direct property investment. Furthermore, in order to provide the ability to adapt to market movements, the Manager has the flexibility to alter the 70:30 default position of the Fund within pre-set benchmark ranges.
The Fund will be highly diversified from launch, providing incoming unit holders with access to pooled real estate investments with a combined value of £1.5 billion. Established in 1971, the £1.1 billion Managed Fund is LGP’s longest operating property fund. An actively managed, daily-priced, UK property fund which invests directly in freehold and leasehold properties, it also has a provision for 15% to be invested in indirect property vehicles and derivatives. The £470 million Global REITS Index Tracker Fund was launched by LGIM in 2006 and aims to provide global, diversified exposure to listed real estate equity markets around the world by tracking the FTSE EPRA/NAREIT Global Real Estate Index.
Michael Barrie, Director of Balanced Funds at Legal & General Property, comments:
“Following the launch of the UK Property Income Fund, the LPI Fund and a number of other new and innovative products last year, this latest fund continues to showcase LGP’s ability to respond quickly to changing market trends and satisfy investors’ appetite for fresh products that are aligned to their core needs.
Pete Gladwell, Business Development Manager at Legal & General Property, comments:
“The Fund has been designed to enable the growing market of DC pension schemes to gain access to property market returns, while providing them with enhanced diversification and liquidity. The levels of interest that we have already received from investment consultants and DC platforms are a strong endorsement of the Fund’s optimised structure and signify increasing appetite for innovative products.”
Notes to editors
Legal & General Property
Legal & General Property (LGP) is a wholly-owned subsidiary of Legal & General Investment Management (LGIM) and one of the largest institutional property fund managers in the UK. LGIM had funds under management of over £356bn as at 31 March 2011, whilst LGP manages or co-manages 16 separate funds or vehicles and 2 segregated mandates, with an aggregate asset value of over £9.8bn as at 31 December 2010. These funds include:
Specialist Pooled Funds
The Leisure Fund Limited Partnership; Industrial Property Investment Fund; UK Logistics Fund; Arlington Business Parks Partnership; and the English Cities Fund
Single Asset Vehicles
Bracknell Regeneration Partnership; Central Saint Giles Partnership; Performance Retail Limited Partnership and Warrington Retail Limited Partnership
Life Fund; Linked Pensions; Linked Life; Managed Fund; Property Unit Trust, UK Property Income Fund; and LPI Income Property Fund.
LGP’s UK-focused fund management platform has built and retained a strong track record of out-performance across the sector. Owing to its size, diversity and penetration, it benefits from best in class banking and property industry contacts which, along with its wealth of in-house skill and expertise, have enabled it to continue to attract and secure high quality market opportunities. Taking a client-centric approach, the business places the highest priority upon integrity and transparency. Sector specialists cover each sphere of the market and are supported by LGP’s market-leading research capability.
LGP’s sector specialism’s cross all facets of the real estate market. In particular, the Company has a major development platform, responsible for delivering the West End office market’s latest landmark, Central Saint Giles, and currently involved in developing two further high profile London schemes, Walbrook Square and Agar Street, as well as significant town-centre retail regeneration projects, including Bracknell, Northampton and Eastbourne.
For more information please contact:
PR Manager Investments
t: +44 (0) 2031 242096
About Legal & General
Legal & General Property Limited.
One Coleman Street
London EC2R 5AA.
Registered in England 2091897.