Tag Archives: fund
Abu Dhabi Fund Involved In $1bn Tokyo Build Deal
on Aug 7, 2013 A group including an Abu Dhabi sovereign fund and former US insurance magnate Maurice “Hank” Greenberg have agreed to buy a prominent Tokyo office building for $1bn, the biggest property deal in Japan since February, people with direct knowledge of the transaction said. The decision by the foreign and Japanese investors to acquire the ageing but distinctive structure in central Tokyo highlights expectations that real estate values will revive as Prime Minister Shinzo Abe’s pro-growth economic policies boost investor sentiment and risk appetite. It will be Japan’s biggest property investment including foreign investors since the 2008-09 global financial crisis. The group, led by property investor by Asia Pacific Land, includes Abu Dhabi Investment Council, Japan’s Secured Capital Investment Management Co and C.V. Starr & Co Inc, which is run by Greenberg, the billionaire former chief executive of American International Group Inc, the sources told Reuters. For the purchase for more than 100 billion yen ($1.01 billion) of the 14-storey Shiba Park Building, the investors will inject about 10 billion yen in cash, said the sources, who asked not to be named because the deal is not public yet. Lenders including Mizuho Bank, Shinsei Bank and Commerz Japan Real Estate Finance Corp, a real estate lending unit of Commerzbank, will extend a combined 90 billion yen in loans, the sources said. The investors and banks declined to comment or could not immediately be reached. Japan’s real estate market, which fell sharply after the late 1980s asset price bubble, crashed again in the global financial crisis and rents in Tokyo have fallen steadily ever since. But there are growing signs of an upturn: vacancy rates in Tokyo’s quality buildings started falling last year, according to real estate services company CBRE. Monthly rents in central Tokyo, which had dropped since 2008, have been flat since last year. The Shiba Park Building deal is a sign of confidence that the 31-year-old building will keep attracting tenants and maintain steady rental income as Japan’s economy is expected to grow. Investors generally prefer newer buildings whose rental income is higher. Property values are expected to rise under “Abenomics”, a programme of heavy government spending and massive monetary easing meant to end 15 years of deflation. The Bank of Japan has been pumping money into the financial system to keep interest rates low, enabling investors to borrow money cheaply. Anticipating rising property values, US-based Westbrook Partners led the acquisition in April of a majority stake in a Tokyo office tower for about 30 billion yen. Tokyo’s Tiffany Building has been put up for sale as the owner Asia Pacific Land, leader of the Shiba Park Building group, bets on a recovery in property prices. The long, imposing Shiba Park Building – nicknamed the “Gunkan”, or “Warship”, building – has more than 83,510 square metres available for rent, much more than other buildings in its neighbourhood near Tokyo Tower. Its total floor space of 102,300 square metres puts it in the same class as the iconic Marunouchi Building, a prime commercial property in the capital’s hottest business district near Tokyo Station, at 159,720 square metres. One benefit of a big building is that it can host the headquarters of a large company. Daiei Inc, which once was Japan’s largest supermarket chain, is a former tenant of Shiba Park Building. The structure was bought by a fund managed by K.K. daVinci Holdings, once an aggressive property investor, in 2006 – near the height of the pre-crisis boom. It paid 143 billion yen in a deal with a fund managed by Morgan Stanley. The building went under lender control when the daVinci fund defaulted on the loans as the global crisis depressed property values worldwide. Continue reading
Fund Review: BGF World Agriculture fund
ivestock investment boosts short-term performance By Nyree Stewart | Published Jul 01, 2013 A recent short-term performance boost for the $294m (£187.1m) BGF World Agriculture fund is a result of a move towards more downstream areas of the agriculture sector, such as livestock, in the past six months. However, the fund’s performance has lagged its benchmark in the year to date. The Luxembourg-domiciled fund, co-managed by Desmond Cheung and Richard Davis, targets agriculture sector growth but specifically focuses on capturing what farmers are doing at any one point in the cycle. Mr Cheung explains: “Some of our competitors would expand quite a bit further away into the food sector, but while we have a little bit of food sector exposure in this fund, it is mainly due to the fact they have direct relationships or dealings with the farmers. So we don’t generally buy into companies such as Wal-Mart even though obviously it is in the food supply chain.” Process The fund’s investment process is primarily bottom-up, with Mr Cheung noting the key underlying driver is stock selection based on valuation, with a three- to five-year view on the company. But he adds: “Obviously, this is quite a cyclical sector, so we have to include a top-down overlay to determine which part of the cycle we are in. We try to incorporate the two and come to a conclusion on the recommendations on each of the names and the size of the position within the fund.” The fund is also not constrained by the market cap of companies available within the agriculture sector, and currently has roughly 10 per cent of the fund allocated to small caps, with a further 30 per cent weighting in medium-sized businesses. Performance Since launch in March 2010, the sterling-hedged share class of the fund has returned 15.81 per cent to June 10 2013, compared with a 24.92 per cent return from the benchmark FSE DAXglobal Agribusiness TR USD, according to Morningstar. However, on a discrete-year basis, the fund’s sterling share class significantly outperformed the index in 2012, with a return of 11.49 per cent compared with the benchmark return of 8.32 per cent. The manager points out the fund has not excluded any parts of the agriculture sector, so while some may have the perception the universe consists solely of seed or fertiliser or equipment companies – areas that are fairly consolidated – this is not the case. “The way we classify or define the agriculture sector is little bit wider. On one side you have arable farmers, which are those growing crops such as corn, wheat and soya beans and so those would be captured more under the seed, chemicals, equipment or fertiliser companies. But then other parts of the farming world that have been neglected in the past three years are the livestock sectors. When corn or soya bean prices rallied in the past couple of years, those are effectively the input costs that go into the production of meat, so they’ve been suffering from the high rises in crop prices.” Continue reading
New Forestry Investment Fund Launched
29.05.2013 A new fund has been announced that will focus on investment in forestry assets across Europe. The ForestCare Investment Fund is set to be launched by Diapason Commodities Management, which is a signatory of the Principles for Responsible Investment initiative and as such follows the guidelines relating to fiduciary duty. As a result, investments will cover forest properties and activities resulting from the industry, including forest management, wood production and processing. Furthermore, all potential investments will be subject to stringent checks with regard to sustainability, in particular their environmental, social and corporate governance impact. However, the fund will not restrict itself in terms of the type of investment, taking a number of assets into considerations, including equities, bonds, forest plots and all related derivatives. In an effort to take advantage of the comparatively low levels of private forestry ownership, ForestCare will include plots or land leases covered at least partially by forests exclusively in Europe. Forestry properties will form one-fifth (20 per cent) of the entire portfolio. On top of taking ownership of and managing forests across Europe, the fund will look to invest in shares or bonds of companies already operating within the forestry industry, providing they are doing so responsibly. Related derivatives and other investment opportunities within the forestry sector will also be considered, including biodiversity credits, carbon credits and REDD credits, which relate to efforts to mitigate the effects of deforestation. Mark McDonnell, managing director of Diapason Commodities Management, said: “ForestCare is a completely new way of approaching investment in forestry and with our approach to biodiversity in forests this investment opportunity has forest sustainability at its core.” “Crucially, the fund is structured to reconcile economic profitability with the need to make intelligent use of natural resources – providing investors with a diversified portfolio which is uncorrelated with other asset classes,” he added. Designed for those looking to invest in pension funds and institutional investors, ForestCare will have a minimum investment of €125,000 for the A class and €1 million for the institutional or I class. HD FestForest provides forest management in Estonia, Latvia and Lithuania and is a subsidiary company of HedeDanmark. Continue reading
