The Gartmore multi-manager cautious and balanced portfolios have held the Goodman UK active property fund, formerly the Arlington property fund, for three years.
Last year saw Gartmore aggressively reduce its exposure to UK commercial property, which had been as high as 20 per cent. The asset class now comprises 3 per cent of the cautious fund and less than 2 per cent of the balanced fund through the Goodman fund.
Goodman is an international property group which entered the UK market with the acquisition of Arlington Securities in 2005. Its UK active property fund adds value to commercial properties through redevelopment, refurbishment and renegotiating leases.
Gartmore says the Goodman fund has not been immune to recent problems in the sub-prime market and the sell-off in commercial property funds. However, it believes UK commercial property is an asset class that investors in its cautious and balanced funds still want some exposure to.
The multi-manager team regard the Goodman fund as different from other property funds in that it focuses on yield.
Deputy head of multi-manager Tony Lanning says: “The Goodman fund tends to avoid trophy assets and has suffered as a result of the problems in sub-prime. It is not in the prime market and does have gearing – the best part of 50 per cent – so we would not have expected it to hold up in the sell-off but we see this as a long-term holding and want to keep a token position in it.”