OPM Fund Management has launched a multi-manager property fund, with the New Star international property fund as its biggest holding.
The CF OPM property fund is a mixed-asset portfolio comprising property funds, real estate investment trusts, direct equities and structured products. It has a 22.5 per cent holding in the New Star fund which invests globally in bricks and mortar outside the UK.
At 62 per cent, bricks and mortar is the biggest weighting in OPM’s property portfolio. The company says this is because it is aiming for a total return, of which rental income from direct property investment is a crucial part.
Exposure to Asian Reits is relatively low in the initial portfolio through a 5 per cent holding in the Barclays Asian real estate income fund, which uses covered call options.
Investment director Tony Yousefian says: “We hold the New Star fund because we are trying to keep our UK exposure to a minimum.We feel the yields on UK commercial property are no longer there. We have been slightly cautious on Asian Reits from a global equities point of view but will be increasing our weighting.”