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Dolfin looks to the future for housing investment

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Commenting on the recent survey published by TIME Investments, reported on in Wealth Adviser last week, that found that over 40 per cent of investors are planning to increase allocations to real assets this year, Dolfin’s head of investment management, Simon Black, says that this is very much in line with his firm’s experience.

Commenting on the recent survey published by TIME Investments, reported on in Wealth Adviser last week, that found that over 40 per cent of investors are planning to increase allocations to real assets this year, Dolfin’s head of investment management, Simon Black, says that this is very much in line with his firm’s experience.

He says that their clients have now moved on from wanting to talk about US equities, for instance, within their portfolios to more emotive issues.



For Dolfin, that has been recognised in a series of think pieces on food, water and the latest is shelter. “Moving away from basic concepts and looking at the future has been really useful in engaging in dialogue at the next level with our clients,” Black says.

“Sometimes they are focused on profits per trade but increasingly the younger generation has more emotive issues that are bringing up questions such as how a portfolio is constructed.”

Traditionally, Black says that infrastructure investment is secured against a specific infrastructure project.

His note says: “We are looking at it from the opposite perspective that as humans, irrespective of culture, wealth, nationality and location on the planet, we all need food, shelter and water. Without these three staples, we will perish.”

The concept of shelter has changed dramatically over the last 15 to 20 years, Black observes. And in his note he writes that over the last 10 years, new tech giants have emerged that have transformed traditional aspects of life. 

“AirBnB transformed the rental/hospitality industry, Uber transformed the taxi industry and Amazon transformed the retail industry. When we consider shelter, we think too about the impact and future of housing. This ranges from the use of 3D printing and modular housing, though the concept of providing shelter to millions of refugees forced to relocate, to the incorporation of technology and smart devices within the home.” 

In terms of investment, Dolfin is looking at companies in Germany that have a reasonable valuation and risk reward characteristics and are involved in modular housing construction or that provide technology or materials for that sector.

“Using this route, we can have one idea with five different angles and exposures both on the equity and debt side.”

Within the UK, Dolfin is looking at UK companies that have some exposure to the Specialised Supported Housing (SSH) sector, which is a sector that Dolfin feels is overlooked.

Dolfin’s note on the SSH sector says: “It offers investors uncorrelated returns in a sector that has favourable demand dynamics, backed by the UK Government. It has the added benefit of being a socially responsible sector to invest in as it contributes to making a real positive difference to the most vulnerable adults within British society.”

“We have moved on from some of the classic large UK-based housing providers who are exposed to the rise and fall of housing market exposure,” Black says. “We are looking not at what is going to happen over the next three to 12 months but the next three to 12 years.”

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