New research with UK wealth managers and financial advisers shows a growing focus on property investments as a route to de-risking through diversification and achieving an increased focus on ESG.
The research, commissioned by TIME Investments which specialises in real asset income-producing funds, shows that 70% of respondents are targeting between 11% and 20% allocation to property as part of their clients’ portfolios. More than two thirds (67%) of advisers surveyed are using UK direct property (funds that directly own physical assets) and 30% are allocating to listed property such as REITs.
The research shows that investment in property funds is set to rise, with over half of respondents (53%) expecting to increase their clients’ allocation to direct property over the next 12 to 24 months, with 47% keeping allocations the same. Half said they expect to increase their allocation to listed property, such as REITs, over the next 12-24 months, with 49% expecting no change in allocation. In both cases, the research shows that the increased focus on investing in property funds is driven by a desire to de-risk portfolios through diversification, followed by an increased focus on ESG.
Advisers and wealth managers are also keen to explore innovative options to enable their clients to access property investments. For example, the majority (98%) of those interviewed said they would be likely to recommend a ‘hybrid’ property fund to a client, which provides a unique blend of direct property and listed securities such as REITs.
When asked to select the top three reasons for selecting hybrid property funds for their clients, 70% selected their ability to provide attractive risk-adjusted returns and two thirds (67%) selected their ability to lower volatility when compared to a portfolio of listed real estate securities. A further 53% selected the attractive diversification benefits hybrid funds offer across a wide range of property sectors.
“Our research shows that advisers and wealth managers are increasingly looking to property investments as a route to diversification and a way to help their clients achieve attractive risk adjusted returns, without the volatility associated with mainstream equity investments.”
TIME Investments offers a range of innovative property funds including their hybrid property fund, TIME:Property Long Income & Growth Fund, which has this month celebrated its three-year anniversary. It combines a portfolio of primarily UK listed real estate securities and directly held long income properties in defensive and economically sustainable sectors and is designed to provide retail investors with a consistent and attractive level of income alongside capital growth prospects.
TIME is part of the Alpha Real Capital Group, which encompasses Alpha Real Capital LLP (AlphaReal) and TIME Investments. AlphaReal is a specialist institutional real assets investment manager focused on secure income strategies. It invests in UK and European assets with predictable secure long-term cash flows. It provides market leading and innovative real asset solutions across a range of investments such as Commercial Ground Rents and long lease property, renewable infrastructure, social infrastructure and secured lending.
TIME is the Group’s authorised wealth management investment solutions arm. The Group works with a wide range of UK, European and international investors, including pension funds and other large institutional investors, as well as private investors, family offices and wealth managers. Together, the Group has a 180-plus strong professional team and £4.5 billion of assets under management.
The value of investments and the income from them may fall as well as rise as a result of fluctuations in the market, currency or other factors and investors may not get back the original amount invested. Any past performance data cited is not a reliable indicator of future results.
