Standard Life Investments has announced that its Long Lease Property Fund has passed through £1 billion in assets under management.
The first of its type when it was established in 2003, the Fund has grown steadily and contains a well diversified and high quality portfolio of UK real estate assets.
The Fund's performance is ranked in the top five over 1, 3 and 5 years in the most recent AREF/IPD UK Balanced Pooled Property Fund Index and is one of only two funds in the index to have delivered positive returns over the last five years*. The average unexpired lease term is 23 years, which is over double the average lease length in the UK property market as a whole**. This, together with the strong tenant quality, has added to the attractions of the Fund, which has enjoyed widespread support amongst the UK institutional pensions market. 73% of the Fund's income is currently subject to RPI or fixed increases, assisting with the Fund strategy to reduce volatility of returns, and provide income growth and sustainable yields for investors.
As institutional investors continue to search for attractive and innovative investment solutions, Penny Green, Chief Executive, the Superannuation Arrangements of the University of London, commented:
"We are very pleased to have selected Standard Life Investments and their Long Lease Property Fund. Their Fund has proved to be a winning investment proposition and one that has helped our scheme to better achieve our investment ambitions".
Commenting on the milestone, Richard Marshall, Fund Manager, Long Lease Property Fund said:
"All the holdings in the Fund have been carefully selected for their secure income and capital growth attributes in line with our strategy. Since inception, the Fund has delivered a return of 7.5% per annum, net of fees, during a period of extreme turmoil in the real estate market. We have invested in excess of £500m into the UK market over the last 3 years, helping to increase the diversity and security of the Fund's income profile**.
"The fact that many of our clients in the Fund have steadily increased their allocations is testament to the continued attractions of our portfolio and the Fund remains open for new investment".
The Long Lease Property Fund enables institutional investors to add value over a traditional bond allocation to better assist in the payment of pension fund deferred and pensioner liabilities. The Fund is fully invested and continues to be open for new investment. Standard Life Investments recently announced that its Canadian real estate fund has passed the CD $1 billion in assets under management in Canada.
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