AXA Investment Managers has launched a global flexible property fund to give exposure to long-term returns from direct property, through investment in listed debt and equity instruments from publicly traded real estate companies.
The fund has a target allocation of 60% equity to 40% debt, as it aims to copy the liability side of a real estate company’s balance sheet. This also enables the fund manager to seek a return profile similar to direct real estate investment, but with daily liquidity, reduced volatility and improved diversification, as well as lower transaction costs than holding real estate directly.
AXA IM global head of listed real estate and lead manager for the fund, Frédéric Tempel, commented: “Property holds a lot of appeal as an asset class with strong historical performance and resilient income, however, investors have previously had to choose between illiquid physical real estate, and liquid yet often volatile real estate equities. Mixing real estate equity and debt instruments in one liquid strategy is a relatively recent investment opportunity. The disintermediation of banks following the global financial crisis has created a much deeper market for real estate debt.”