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OPM is building up property Fof

OPM Fund Management says it is experiencing problems finding a benchmark for its property fund of funds because it combines a range of property-related investments including property funds, listed securities and Reits.

The fund aims to provide higher returns than traditional bricks and mortar property funds and benefit from the greater liquidity of property shares but this makes comparisons difficult for performance purposes, says OPM.

The fund is in the specialist IMA sector, which it points out is not an appropriate measure of performance because it contains miscellaneous funds that do not fit in other sectors, including funds as diverse as a single-country Korea fund and biotechnology portfolios.

OPM says the closest indices to the fund are the UK commercial property index and the FTSE Epra Nareit global index. Although OPM uses these indices as an indicator of performance, it says it will not use them as a benchmark when constructing its portfolio.

The fund firm says the recent markdown in the property sector was well timed for it as it came at the same time the group was looking to build up the holdings in its portfolio.

Recent additions to the portfolio include Trinity Capital, Eastern European property investment trust, Dawnay Day Treveria and the iShares Epra/Nareit Asia property exchange traded fund,

OPM has been monitoring Trinity Capital since it listed on the Alternative Investment Market in 2006. The multi-manager thinks it is well poised to deliver attractive returns from its India office and its focus on the retail and hospitality sectors. Dawnay Day Treveria is a play on German commercial property, an area OPM feels is attractive over the long-term.

Eastern European investment trust, managed by former Newton European fund manager Keiron Gallagher, has had a slow start, OPM says, but adds it expects the fund to be a strong performer. The ETF was added to provide cost-effective access to the Asian real estate markets.

OPM investment director Tony Yousefian says: “We wanted to provide exposure to the Asian property index because it is a broadly based index, it is liquid and provides a reasonable yield.”


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