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MPL launches property fund as deep discounts open up in UK market

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Managing Partners Limited, which specialises in traded life policy funds, has launched a property fund that aims to take advantage of the deep discounts that are appearing in the UK market

Managing Partners Limited, which specialises in traded life policy funds, has launched a property fund that aims to take advantage of the deep discounts that are appearing in the UK market as a result of forced sales.

The British Property Opportunities Fund will target an annual return of 10 per cent-plus by investing in both residential and commercial property, including distressed portfolios, high yield rental units, development opportunities, leasebacks and reversionary gains schemes.

MPL believes this year is an opportunistic time to launch a property fund because the market has softened. Deep discounts are appearing, not least because many property funds are fully invested with leverage and have physically to dispose of properties to meet redemption requests from investors at a time when sentiment has cooled.

‘The UK property market is likely to provide one of the great investment opportunities in 2008,’ says managing director British Property Opportunities Fund. ‘This is an ideal fund for those who see value in property because it has no legacy issues and it will be one of the few funds in an acquisitive mode in 2008.

‘We are seeing discounts to market value of around 20 per cent being offered on both private and commercial property at the moment, and in a leveraged fund such as this we believe the fund could produce high returns in a very short time.

‘Property prices will cool this year, but it is a cyclical market and the British desire to own or invest in property when nothing else offers good value will return. When the dynamics of the property market change then other opportunities will become available, but in the meantime, now is a great time to get into the market.’

The property adviser to the fund is Horizon Asset Management. The minimum investment is GBP50,000, or GBP2,500 if an investment is made via an insurance bond or self-invested personal pension wrapper.

There is a 5 per cent initial charge, giving an initial allocation of 95 per cent, and an annual management charge of 1 per cent, plus a performance fee of 50 per cent on all gains above 10 per cent. Commission for IFAs is 4 per cent initial and 0.5 per cent trail. The fund will be leveraged by up to 70 per cent at the discretion of the board to enhance returns.

Managing Partners is a multi-disciplined investment company that specialises in managing alternative asset classes for institutions and sophisticated investors. It manages various Cayman-domiciled collective investment schemes and regulated mutual funds with total assets exceeding USD100m.

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