Group hopes to launch EURO-HEDGED PROPERTY FUND BY END OF MARCH
Irish Life International (ILI) is planning a euro-hedged version of its multi-manager property fund.
The product would be euro- denominated and Dublin-domiciled but identical in structure to its existing sterling-denominated portfolio.
'We are looking at hedging sterling assets into euros,' said Hooman Kaveh, investment director at ILI. 'If we get a solution that is acceptable, we hope to launch the fund by the end of March.'
ILI would be able to put the fund together quickly as most of the underlying relationships are already in place via the existing product. 'It would simply be a case of adding an extra element of currency hedge,' Kaveh noted.
The open-ended, sterling-denominated property fund, which is available via ILI's offshore bonds, has 30% invested in ground rent, split between two funds, with 50% split between three property fund managers: Brandeaux, Close Brothers and Cardales. The remaining 20% is in ILI's University Residence Development fund.
The group has taken assets of around £1m into the fund since its launch at the beginning of 2003.
Kaveh believes commercial property still has some way to grow and remains attractive to investors. He said: 'We are committed to property as an asset class. There is a focus on lower volatility and the solid base of rental income provided by the fund helps achieve this.'
The fund was originally launched partly in response to ILI receiving enquiries from intermediaries looking for ground rent funds. The ground rent exposure contributes a steady income to the multi-manager property fund, Kaveh said, but pure ground rent funds are both highly illiquid and difficult to access.
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