The funds will be managed by Colonial First State Global Asset Management head of property securities John Snowden, who is based in Australia. He joined the group in February and previously managed global property securities at UBS.
The funds will use the same investment process as the Colonial First State Colliers International Property Securities Fund, an Australian fund Snowden and his team will combine a top-down macro-economic approach with detailed bottom-up research. They will look for mis-priced property securities where the stockmarket price does not reflect the intrinsic value.
First State says it launched the new funds in the UK because the listed property securities market is full of exciting investment opportunities. The introduction of real estate investment trusts in more countries is another reason why First State is exploring this area of the market. First State regards the Reits as a tax efficient high dividend paying form of investments. It says there is more choice in the listed property securities market, with UK investors not only interested in the domestic market.
The global property securities fund will be geographically diversified, investing in the US, Finland, France, Netherlands, Spain, Italy, UK, Japan, Australia, Hong Kong, New Zealand and Singapore. Future investment opportunities are expected across Europe, Canada and Asia as listed property securities markets develop, with the introduction of Reits in the UK and Germany.
The Asian property securities fund will also be geographically diversified, investing in Japan, Australia, Hong Kong, New Zealand and Singapore. Future opportunities may come from the Philippines, Malaysia, India and Thailand.
Investors have become more interested in overseas property exposure and property securities provide easy access because they are more liquid than direct property investments. First State says it has analysts based in every key market, which will give the fund a sharp focus in each region. However, it is bound to face competition from the likes of Skandia Investment Management, Swip and Fidelity, which have all introduced property securities funds over the past 12 months.