Canada Life Investments will launch a property fund in the coming year.
The fund launch, subject to regulatory approval, will see the asset management arm of Canada Life use existing managers from its general account business to run the retail fund.
Frank Maret, head of distribution at Canada Life Investments, believes there will continued demand for income, despite a rising rate environment, and thinks property can fill some of this void.
“There is a need for income across all client segments, even though rates will go up we are still in a low yield environment and rates will not go up rapidly,” says Maret. “If you can provide a decent yield with a property fund, that makes sense.”
“We have a massive depth and breadth of expertise in property,” he says, but as these funds are currently run for Canada Life’s own book of business it needs to be packaged into a retail fund.
A spotlight was placed on liquidity of property funds recently, with the closure of Aviva Investors’ £194m European Property fund, when Aviva said it could take up to two years for investors to get their money back.
Maret says liquidity is a large consideration for the manager when putting together the new fund. “Liquidity in property vehicles is something everyone is cognisant of, it’s part of the beast,” he says, although did not provide more details on how the fund will be structured.
Data from the Investment Association shows that property was the fourth most popular sector in November, with £141m of net retail sales.