AEGON launches small property investment vehicle

AEGON Asset Management has announced the launch of a new fund designed to invest in small real estate assets on behalf of pension fund investors.

Its Active Value Property Fund will concentrate on investment in retail, industrial and office real estate valued at between £3 million and £10 million, although it could also make leisure, medical, student and residential property acquisitions as well.

The fund will have virtually no gearing and an initial projected yield of seven per cent and is intended to outperform the Investment Property Databank's (IPD) all balanced funds index by 0.5 per cent on a rolling three-year basis.

Its lead manager David Wise remarked: "We believe there is a gap in the market for our fund to gain a competitive edge by buying properties in the £3-10 million size range, that are too big for private buyers but too small for most institutional investors."

The IPD's all balanced fund index showed a 7.9 per cent total return over the final quarter of last year, but also displayed a total return of -1.8 per cent for 2009 as a whole.

03/03/2010