Kames Capital plans to launch its first ever Property Authorised Investment Fund (PAIF) for retail investors in the first quarter of the coming year.
The fund will be co-managed by David Wise and Alex Walker, part of a team that already manages a number of institutional funds, including the Kames UK Active Value Property fund.
The PAIF will invest the majority of its assets in direct property, with 50% managed using the team's active value style and 30% in core assets yielding 5.5%-6.5%.
The remaining 20% will be in indirect property, including REITs, and cash.
PAIFs have enjoyed a surge in popularity in the last year, with firms such as Standard Life Investments converting existing funds into the new structure, and other groups launching them outright.
The investment strategy of Kames' PAIF will see it focus on smaller properties between £2m-£10m in value, with an aim to deliver an income return of 8%-12% from the fund annually.
Phil Clark, head of property investment, said: "This fund builds on the investment track record we have developed in this strategy over nearly four years, and for which we are well known in the institutional market.
"The team's expertise lies in in stock selection, asset management and releasing that added value through successful sale of the properties."
Walker said the fund will be actively seeking seed investments in 2014, but CIO Stephen Jones said the fund will launch with ‘reasonable critical mass' at the start.
"There are a number of behemoth property funds in the market, but we can exist around them and offer something a bit different," he added.
Lack of innovation for solutions
Some 2,000 consumers affected
Achievements, charity work and other happy snippets
Appetite has suffered since Brexit vote
'Failure to pay attention can result in enforcement'