There is definite proof that sustainability-focused funds are outperforming their conventional counterparts. But some experts believe the traditional explanations for this are wrong.
Prudential UKÆs life insurance parent has gotten the ball rolling by throwing its existing Asia Pacific property portfolio into the new fund.
PruPim and La Salle had previously worked together on a segregated account for the life insurer, with LaSalle undertaking acquisitions and acting as asset manager for PruPim.
This is a fund for those interested in established investment properties as opposed to an opportunistic fund. These existing assets will largely be representative of the profile of the fund going forward, namely institutional-grade quality in core locations generating a high proportion of returns through rental income.
The fund is open-ended with no reported target level, but with further committed capital from the principals, in addition to leverage, PruPim has the ability to grow the fund to $1 billion.
PruPim is not revealing the level of fees payable by investors, save to say that different share classes get charged different amounts.
Regarding possible investment opportunities, Jonathan Allen, the CEO of PruPim Singapore, says: ôIn the office sector, we consider that Japan and Singapore are well positioned cyclically while South Korea will continue to offer stable returns over the medium term. The core Asia-Pacific retail markets of Hong Kong, Singapore and Australia continue to do well underpinned by above-trend economic growth and robust levels of intra-regional tourism.ö
Is this the right timing though for a fund like this, with property prices already quite strong in Asia?
ôOn the contrary,ö says Allen, ôthe respective property cycles within this investable universe suit a core/core-plus investor. We are seeking stable income-driven returns which, following yield compression across Asia Pacific over the past three years, is what is on offer in the respective markets.ö
Prupim is part of the M&G Group, which in turn is a unit of the asset management arm of Prudential PLC in the United Kingdom and Europe. In November 2006 AsianInvestor.net reported PruPimÆs establishment and its appointment of seven senior executives.
LaSalle Investment Management is a member of the Jones Lang Lasalle group. It has $40 billion in assets under management, of which 10% is in Asian property.
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