How advice firms are exposed to property

Adviser firms have revealed their exposure to commercial property in the wake of some of the UK’s largest funds applying restrictions to stem outflows.

Fund Strategy spoke to a range of national advice firms and networks to see which funds they have on their panels, how big a proportion property makes up of portfolios and what they are doing to protect advisers and their clients (see table below).

A spokeswoman for Standard Life-owned 1825 says: “Commercial property is an attractive long-term investment and has a place within a broadly diversified portfolio. However, we recognise there can be specific risks associated with investing in property which is why we believe it should be seen as a minority investment for most clients – hence the reasonably low exposure in the 1825 portfolios.

“The role of financial planners is key in the current situation, it’s important they keep clients informed and, where necessary, reassured. The measures being put in place by property fund managers at the moment are intended to help protect the long-term interests of our clients and we would remind them that they are invested for the long term.”

Company Property funds on panel Client exposure
bellpenny L&G UK Property Feeder, Standard Life UK Real Estate Income Feeder, Threadneedle UK Property Authorised Trust Feeder, Henderson UK Property PAIF Feeder Less than 10% in any single portfolio
sandringham No direct investments – underlying funds (Verbatim, F&C, Architas and Fusion Wealth) have “small exposure”  2-3%
Chase de Vere Henderson UK Property, L&G UK Property, M&G Property Portfolio, Standard Life Investments UK Real Exposure  5-12%
1825 Henderson, Standard Life Investments  5-10%

Chase de Vere head of communications Patrick Connolly says: “We don’t do tactical short-term trading and certainly not in commercial property.

“Our advisers have been regularly in touch with all of our clients in the run up to the EU referendum and during the fallout afterwards. We have also sent centralised communications to all clients, giving our views and making sure they don’t panic.”

A Bellpenny spokesperson says: “Our investment philosophy is aligned to Distribution Technology’s strategic asset allocation, so our maximum exposure to commercial property is less than 10 per cent in any single portfolio. At the time of writing the maximum percentage exposure we had in any one portfolio was 8 per cent. We understand the needs of our clients and certainly see no reason for overreaction to the situation.”

In addition, St James’s Place has £2.7bn in its own property fund. Its response was to move to bid pricing – shifting costs to investors leaving the fund.