Cromwell launches Property Securities Fund
15/04/2008
Property and funds manager Cromwell Group (ASX:CMW) has today announced the launch of a property securities fund to take advantage of strong buying opportunities that Cromwell sees amongst Australian Real Estate Investment Trusts (A-REITs¹).
A-REITS, previously referred to as Australian Listed Property Trusts, fell more than 24 per cent² in the 12 months to March 31, 2008. The Cromwell Phoenix Property Securities Fund (the Fund) will target opportunities in the sector to capitalise on what Cromwell believes are undervalued stocks.
Cromwell has appointed boutique equity investment manager Phoenix Portfolios Pty Ltd to manage the Fund, giving retail investors access to Phoenix’s established research and investment skills previously only accessible by institutional investors.
The open-ended fund aims to outperform the S&P/ASX 300 A-REIT Accumulation Index¹ over the medium to long term by building a diversified portfolio of predominantly ASX-listed property securities.
Cromwell Group will provide $5 million in seed capital for the Fund to facilitate investment in a strong initial spread of securities.
Cromwell Executive Chairman Paul Weightman said the new Fund would complement Cromwell’s existing property funds management business.
“As a specialist property funds manager, it is a logical progression for Cromwell to offer a property securities fund as part of its product offering,” Mr Weightman said.
“Both historically and on a net asset value basis we think selected companies within the A-REIT sector present significant value. The fund’s goal will be to find those companies which present the best opportunity for consistent returns and capital growth.”
Phoenix is a “bottom-up” manager that builds portfolios of stocks that it believes are good-value selected through its own research. The team includes former Citigroup fund managers Stuart Cartledge and Michael Wood who have been selecting and researching stocks together for 15 years.
Phoenix Director Stuart Cartledge said the A-REIT sector offers a very strong investment opportunity for the medium to long term investor.
“Recent market falls have created excellent buying opportunities in the A-REIT sector and we aim to build a strong performing portfolio of income producing securities for the new Fund,” Mr Cartledge said.
Phoenix has a strategically determined capacity constraint of 1.5 per cent of the A-REIT Index allowing rapid portfolio readjustment in response to changing circumstances and what Cromwell sees as a greater opportunity for benchmark outperformance than larger managers. Phoenix’s capacity constraint also enables the Fund to invest in smaller stocks usually overlooked by larger managers. Cromwell believes that these smaller stocks often have the ability to deliver above average growth in earnings and outperform the benchmark.