Thursday, August 11, 2022

Foresight launches sustainable real estate investment fund

liquid Real Estate Investment

The Fund will invest into listed, highly liquid Real Estate Investment Trusts

Foresight Capital Management (FCM), part of Foresight Group, has launched the FP Foresight Sustainable Real Estate Securities Fund.

The Fund, which has received FCA regulatory approval, will invest into listed, highly liquid Real Estate Investment Trusts (REITs) and, with its sustainability focus, is the first UK-domiciled real estate fund of its kind. The Fund is targeting a 4 per cent income yield, and capital growth over a rolling five-year period.

Through investing in listed REITs, the Fund can benefit from the resilient growth trends of real estate assets without compromising on liquidity. With a weighted average market capitalisation of over GBP6 billion within the portfolio, the Fund has a high degree of liquidity by trading the globally listed shares of its portfolio companies and is not dependent on buying or selling physical properties.

The Fund will provide investors with a globally diversified exposure to real estate, investing in companies with assets in Europe, North America and Asia. The portfolio will focus on resilient sectors such as logistics, medical properties and data centres.

Sustainability is a key consideration in the investment team’s stock selection process. The fund will invest only in the shares of companies that the team assesses deliver a net social or environmental benefit, comply with the principles of the United Nations Global Compact for business and demonstrate impact against one of four specific UN Sustainable Development Goals.

Since the introduction of REITs as an investment structure in the 1960s, the listed real estate sector has become a mature and well-established asset class within public markets and is playing an increasingly important role in portfolios.  These assets are often characterised by delivering higher risk-adjusted returns, reduced portfolio volatility and increased sector diversification.

Mark Brennan,  Lead Manager of the new fund, says: As many traditional sources of income come under sustained pressure, the new FP Foresight Sustainable Real Estate Securities Fund enables investors to  capitalise on the income profile associated with real estate investing alongside the liquidity provided by the public markets. The Fund provides global access to sectors of the property market that are well positioned to benefit from modern tailwinds, such as the growth of e-commerce and acceleration of digitisation, which can play a vital role in income-focused portfolios, while directly contributing towards a sustainable future.


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