View more on these topics

Cordea plays undeveloped property game

Cordea Savills

Serviced Land Fund

Type: Exempt unit trust

Aim: Growth by investing in land trading activities over a five-year period

Minimum investment: Lump sum £25,000

Investment split: 100% in land trading activities
Closing date: October 31, 2005

Charges: Initial 3% excluding IFA commission, annual 1%, 20% performance fee

Commission: Initial 4% plus up to 30% of the
performance fee

Tel: 020 7877 4700

Cordea Savills, the fund management arm of the Savills property services group has established the serviced land fund which will target returns in excess of 15 per cent a year.

Informed Choice director Martin Bamford believes that investment in land can make up an important part of a clients investment in the property asset class.

He says: “This fund has the potential to deliver long term returns and the three core strategies look promising. Clients will be able to identify with the scope for increasing land values for onward sale to property developers. Investors in the scheme will be getting access to the expertise at Cofton as the primary asset manager.”

However, Bamford is not entirely happy with the fund. “It appears that the fund will initially have a lack of diversification, investing in a single asset. There appears to also be a conflict of interest with the suggested initial seed asset which is already owned by Cofton,” he says.

Bamford complains that the minimum investment for both private investors and pension trustees is high at £25,000. He adds: “Higher investment amounts are set at increments of additional £25,000 which makes the level of investment inflexible.”

Bamford also regards the charging structure and various performance fees as unnecessarily complex. “The offer of a share in the performance fee to introducing IFAs will be difficult to account for under the new menu regime,” he adds.

Scanning the market for possible competitors Bamford says: “As an unregulated collective investment scheme with a high minimum investment criteria the alternatives are likely to be direct private investment in land with the potential for development and other related land or property developments. If an investor is considering this scheme then they are likely to already have a diversified portfolio of land and property investment which will make a general property fund less appealing.”

Summing up Bamford says: “Cordea Savills appears to be sharing in all of the potential rewards from the investment but little of the downside risk. As a geared investment, intended to be approximately 55 per cent of the gross asset value, there is certainly investment risk to take into account.”

He concludes that advisers should be careful to point out the lack of investor protection available as compensation under the Financial Services Compensation Scheme does not apply.


Suitability to market: Average
Investment strategy: Good
Charges: Poor
Adviser Remuneration: Average

Overall 4/10


Savills reports strong H1 results amid slowdown in market

Savills plc is reporting a strong first half result showing pre-tax profit of 19.9m, up 15 per cent on 2004 results. The property group’s interim results to June 30, 2005 show a turnover of 158.2m up 12.7 per cent on 2004 results. Basic earnings per share for the period rose from 23.5p last year to […]

Network plea for misselling definition

Retrospective misselling com- pensation campaigns are “festering sores” that blight the industry, says Alpha to Omega network chief executive Stewart Wooles. He is calling for a clear and legal definition of misselling, saying the FSA’s treating customers fairly policy can result in advisers being treated unfairly, particularly with retrospective regulation changes. Wooles believes that enc- […]


Almost nine in 10 employers admit failings with post-DRA compliance

The default retirement age (DRA) was abolished more than three years ago, yet new research from Jelf Employee Benefits suggests that the vast majority of employers still have some way to go to fully understand, comply and communicate the landmark legislation change that prevents older employees being forcibly retired on the grounds of age alone.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm