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Commercial property ready for a comeback?

New Star chairman John Duffield is feeling bullish about UK commercial property again.

In an exclusive interview published in this week’s Money Marketing, Duffield says redemptions have dried up and his firm is seeing an increase in inflows.

New Star has also started advertising commercial property again this week – for the first time since the sector slumped.

He says: “I think those who have wanted to sell have sold and we are now moving back into a buying mode. The bad times were in the November, December period but since the new year it has improved to the point where redemptions have now dried up. The long-term case for commercial property has always been as strong as it ever was despite some sensational headlines.”

The investment guru has also hinted he would be interested in setting up a China offering to sit alongside New Star’s India and heart of Africa funds.

He says: “There has been a real change in the world in the past two years but it has been foreseeable for a long time that the emerging markets would overtake more established Western markets. The shift of power from West to East means the West needs to invest in these countries as I see this as a trend that is largely irreversible. For now, India is the focus but I think China is something we would like to do something with in the future.”

And onto another big wig in investment land, Invesco Perpetual chief executive and investment officer Bob Yerbury says the firm is investigating the launch of a number of international offerings in a bid to return its international range to the forefront of its business.

Although nothing has been finalised, the group is looking at a focus fund based on the closed-ended global equity share portfolio which Yerbury runs within the Invesco Perpetual select trust. The fund works on a best ideas approach, with 40 global stocks, and is unconstrained. Yerbury says the group is also discussing setting up a global equity income fund.

He says: “The international range has traditionally been the origin of the Henley business and unfortunately we have seen it fade in recent years and we would like to bring it back to the forefront of our offering again.”

And finally, Skandia Investment Group’s plans to bring out a multi-manager alternatives fund has received a lukewarm response from advisers.

The fund is designed to be a diversifier to traditional asset classes, with low correlation to equities, bonds and property.

The 10 asset classes at launch are likely to be diversified hedge fund exposure, listed timber, precious metals, listed metals, listed infrastructure, hard and agricultural commodities, active currency management, global macro strategy, long/short equity strategy and volatility and each asset class will be outsourced to an individual manager.

Chelsea Financial Services managing director Darius McDermott says: “The impression I get is that it is 50 per cent hedge funds and 50 per cent other strategies which may work but I am bit cautious on the fact that it lacks traditional equities, bonds and property asset classes. I struggle to see which advisers it will look to appeal to.”

Wilson Dean Financial Services director Nick Lincoln says: “I can see the benefits of pulling together all these alternative assets to lower the risk in a complete portfolio but I would still like to see it in action for some time in these markets before I made any investment.”

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