Tri Investments, the specialist fund house recently founded by HSBC's ex-head of pensions Chris Finc...
Tri Investments, the specialist fund house recently founded by HSBC's ex-head of pensions Chris Finch, is set to launch its first fund at the end of June: a residential property scheme focusing on emerging Europe.
The European Residential Property fund will be advised by King Sturge, managed by Morley and is the first property fund to use the UK's Qualifying Investor Scheme.
The target return of the sterling and euro-denominated fund is at least 10% pa net of fees, while the target investors are private banks, financial advisers, discretionaries, and property funds wanting to outsource their emerging European exposure.
Finch is confident he will raise £50m for the launch and would like to see the fund reach £100m by the end of its first year.
The fund's main themes will be urban living - buying property in places like Warsaw and Prague, and holiday homes, especially the Istrian Coast in Croatia and the Black Sea coast in Bulgaria.
Finch said: "Why did I set up a European fund? Firstly, it diversifies investment risk. The EU is a big place - 25 countries. Not all of these countries will be in the same part of the property cycle at the same time. Secondly, there is the convergence story."
The fund will buy prime residential properties directly off-plan then sell them on completion of the development or rent them out. One of the factors that has put other property managers off this area has been the high rate of organised crime.
Finch acknowledged the problem, saying: "You have to make sure you deal with local connections. That is why we have appointed King Sturge."
The European Residential Property fund will be available through four offshore life platforms, although only one, Scottish Equitable International, has gone public. The other three (all of whom are the usual suspects) are waiting until the fund is officially authorised by the UK regulator, which should happen by the start of June.
The fund has two denominations in its retail share class - sterling and euro - with a minimum investment of £5,000 or euro equivalent.
It is possible that Finch will decide to launch a currency hedged share class but he will make that choice just before the launch.
There is an annual charge of 1.95%, an initial fee of 5% of which 3% is paid back to intermediaries as commission and a 0.5% annual trail fee. For money received before the 24 June launch date, Tri will give up its 2% of the initial fee.
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