Henderson Global Investors will launch the Henderson Horizon Pan European Property Equities Alpha Plus fund this week.
The fund is a concentrated long/short equity portfolio that invests in listed property companies across Europe, with flexibility to invest outside Europe if opportunities arise. The fund will focus on companies with the best growth prospects, including smaller companies and those that invest and develop in Eastern and Central Europe.
Patrick Sumner (pictured), head of property equities at Henderson, manages the fund. He says now is a good time to benefit from low valuations in the property market.
“There are several markets where we think there are opportunities,” he says. “The derating of property in the UK has been dramatic. UK property companies are trading at a 35% discount to net asset value (NAV). We think it’s going to reduce. We don’t think we’ll see the ice age the market is expecting.”
Net exposure to British real estate companies is 30% in the model portfolio. Long positions will be about 40% Sumner says, with the short positions bringing net exposure down to 30%.
Sumner adds that Britain is the only region where he expects a significant re-pricing of stocks. “Prices on the Continent haven’t been as low as in the UK,” he explains. “They haven’t seen the same fall in NAVs.”
The fund, which holds 20-30 stocks, also looks for companies outside Europe. In the model portfolio all non-European exposure is in Asia. “We will play that quite actively,” Sumner says.