Investment banker Shore Capital has linked up with property specialist Dawnay, Day up for the introduction of its third fund, the puma property fund.
This Guernsey-based closed-ended fund has a planned life of seven years and will invest in UK commercial property, mainly retail premises and office space. The fund will be actively managed and can be geared by up to 80 per cent.
The management of the property portfolio is the responsibility of Dawney, Day, which was founded in 1928 and currently manages around 500 UK commercial properties.
Within the puma property fund, it will look for properties around the UK that look likely to provide a stable income. Factors such as the location, the appeal a property is likely to have for prospective tenants, the quality of the building and its capital growth potential.
The properties within the portfolio may also be enhanced through renegotiations of leases, finding new tenants, refurbishment, additional facilities and changing the use of the building.
The fund is likely to appeal to high-net-worth investors, people with self-invested personal pensions and institutional investors who are looking for income with the potential for capital growth, and who are looking for an alternative to volatile equity markets which have witnessed cuts in dividend income.
Investors can diversify across different types of commercial property within this fund that are spread across sector and region, which is an attractive feature. However, its investment strategy may be contrarian at times, which means properties may be bought or sold against the prevailing view of the market. This, along with the high level of gearing that is allowed, may represent high risks for the investor if the management team's conviction does not pay off.