An offshore fund-of-fund offering clients access to direct investment in European commercial property is being launched by consulting firm Seven Dials.
The company, which originally specialised as a property fund advisory and research house, became a regulated fund manager in March 2006 and will work through IFAs to deliver its first fund, the Seven Dials European Property Fund.
It claims the fund-of-fund is the first of its kind in the UK as it offers diversified exposure to the pan-European commercial property market, and will be focused mainly on holdings in Western Europe such as Germany, France, Holland and Italy.
Brett Robinson, chief executive of Seven Dials, says the company made the decision to move into fund management after initially specialising in analysis of teh investemnt opportunities in the market.
He says teh company is actually operating in the reverse way to most fund launches as most start on the basis companies know about property and then learn about investment whereas Seven Dials knew about investment first and then started specialising in property.
After concentrating on the data side of teh market, including helping some companies launch tehir own funds, Seven Dials says it finally decided to launch its own fund into European property because other funds currently available tend to be either UK focused, or targeting areas in Central and Eastern Europe.
And unlike Real Estate Investment Trusts (Reits), which came into effect on 1 January and which offer investors indirect investment in property through companies, Seven Dials says the new fund, which will be structured as a Guernsey open-ended investment company, offers investors access to institutional funds that invest directly into European property through vehicles such as UCITs.
Robinson says by making it a fund-of-fund to allow direct investment, the company is offering a true intermediary service by giving investors the chance to access larger funds which normally have a minimum investment of around €5m or more.
He adds: “We are currently experiencing substantial, dynamic growth in European indirect property funds, and Seven Dials, working to a top down and bottom up approach, aims to exploit pan-European real estate market cycles for the benefit of the investors.”
The company, which has been contacting IFAs across the country over the past few weeks to promote the vehicle, says the fund, which will be classed as an unregulated collective investment scheme, will go live on 26 January 2007.
In addition Robinson says the company, which is looking at the possibility of launching additional funds by the end of the year, is also in talks to have the fund listed on an adviser focused fund platform alongside investment offerings form the bigger companies.
He says: “Through this fund investors can benefit from exposure to highly specialised, illiquid vehicles that will potentially deliver outstanding returns from European commercial property investments.”
And he points out although Seven Dials is a small firm, he says the fact the company is known among advisers for its independence and “constant quantitative and qualitative analysis of commercial property funds and their managers”, as well as his own background in fund management, will give the company a “unique strategic edge”, meaning the shift in business focus will be less of a “leap into the dark”.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7968 4558 or email [email protected]IFAonline
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