The multi-manager says the backbone of a healthy economy is a clean banking system that works. It says inter-bank lending rates will start to come down now that banks such as RBS and HBOS have revealed their positions after the recent Downing Street meeting.
OPM believes this will be good for fixed interest and will free up lending to make property shares more attractive. Bricks and mortar property funds have lost 15 to 20 per cent in value during the credit crunch but property shares have lost 40 to 50 per cent.
It says this happened because property shares are easier to realise than bricks and mortar. Investors in property shares could get out easily while those in bricks and mortar faced restrictions and charges on redemptions to deter them from piling out at the same time.
Fund manager Tony Yousefian says the effects of the credit crunch are still working through bricks and mortar funds. He says property company shares will be better value on the way up, with massive discounts to net asset value narrowing as share prices increase.
Yousefian says: “Investors in fixed interest are now being well rewarded for waiting for the recovery to arrive and we will see opportunities to lock into the share price of property companies. Some of the positions in our property fund, such as Dawnay Day Carpathian and Trikona Trinity, are already coming to fruition.
“Once the gap between the overnight interbank lending rate and three-month Libor closes, money-markets can get back to normality.”