Pentacle Property Funds Management has launched Australia’s first diversified unlisted direct property fund of funds with liquidity.
The Pentacle Diversified Property Funds is currently available to wholesale investors with a minimum investment of $50,000.
The funds will be available to retail investors in June 2006.
The funds will invest in the retail, industrial and office sectors by blending leading sector specialists including Centro, Investa, Lend Lease, Stockland and Macquarie Goodman.
Pentacle chairman Professor Bob Officer said that Pentacle is a distinctive new funds management company that aims to add value to investment portfolios by building a portfolio based on leading sector specialist property investment managers.
“The Pentacle Funds will allow investors exposure to these leading property funds, which they might not be able to access otherwise, due to capacity restraints.
“This portfolio will give investors access to a spread of investments and knowledge of managers that even larger institutions will find difficult to replicate,” he added.
The Pentacle Diversified Property Funds are highly diversified across the retail, office and industrial sectors with limited exposure to LPTs for liquidity and cash management purposes.
Pentacle’s chief executive James Burkitt said direct property offers an investment return with significantly lower volatility than other major asset classes in a diversified portfolio.
“An Atchison Consultants study confirming that the addition of direct property to a diversified investment portfolio significantly decreases the probability of a negative annual return.
“At the same time it delivers attractive investment returns, high income and strong tax advantages,” Burkitt added.
In addition, the fund is able to invest up to 40% in overseas markets to take advantage of global real estate opportunities.
The funds have guaranteed total return in excess of 9.5% with significant tax advantages, low volatility and attractive fees.
Investors can choose between two funds, differentiated only by their liquidity and redemption features.
The Pentacle DPF Standard is an open-ended investment fund offering redemption within six months of receipt of a redemption notice, although the trustee expects to meet redemptions within 30 days for amounts of less than $1 million and 60 days for larger amounts.
The Pentacle DPF Enhanced is initially capped at $50 million, but subject to the availability of facilities to support the redemption policy which promises redemption within three days of receipt of a redemption notice.
The MER of the Pentacle DPF Standard will be 1.015%, and the MER for the Pentacle DPF Enhanced will be 1.384%, reflecting the additional cost for providing liquidity.
Professor Officer said the Pentacle DPF Standard had invested $5 million in Centro MCS 36, offering diversification in eight US States, 30 Properties and 318 Retailers.
The fund has received ‘Quality’ rating from Managed Investment Assessments, the second highest rating from the researcher.
Strategic Asset Allocation
Asset Allocation | Range | Neutral | Core Managers | Other Managers |
Retail property | 30 – 60% | 42.75% | Centro, Lend Lease | |
Office property | 20 – 50% | 33.25% | Investa, Stockland, Lend Lease | |
Industrial property | 5 – 25% | 14.25% | Macquarie Goodman, Stockland, Lend Lease | |
Special opportunity / development | 0 – 10% | 4.75% | EG Property Group, Becton | |
Listed property trusts | 0 – 10% | 5.00% | Colonial First State |
By Nelson Yap
