FINANCE NEWS: Credit Suisse invites charities to apply to new property fund

Mathew Little

Investment firm Credit Suisse Asset Management has launched a property fund that is open to applications from charities.

The UK Property Unit Trust is aimed at pension funds and wealthy individuals, as well as charities, with a target size of £250m.

The fund will invest in a portfolio of UK commercial property and may take a stake in other funds which invest in property in order to increase diversity and liquidity. It is intended to provide both capital growth and income return.

Portfolio manager Glenn Newson, head of UK property at Credit Suisse, said: "This new fund has been launched in response to client demand and aims to take advantage of the attractions of the UK commercial property market.

"We believe there are a number of reasons why property should remain a key allocation in a portfolio for institutional investors. Firstly, property as an asset class has outperformed both equities and gilts over three, five, and 10-year periods. In addition, the asset class shows very little correlation to the UK equity or bond markets, thereby providing an important source of diversification," he said.

The Credit Suisse fund joins property common investment funds run by Carr Sheppards Crosthwaite and CCLA in the competition for charity investment. But it will not enjoy the advantage of exemption from 4 per cent stamp duty on the purchase of UK properties, as it is not a registered charity. This could make a significant difference to the return on investment.

In another development, CCLA has announced that its CBF Church of England Property Fund has reached a value of over £100m. The fund was launched in 1999 with a portfolio of properties worth £33m. Since then, it has attracted a number of cathedral, diocesan and parish trust investors.

Jonathan Longstaff, CCLA's client relationship manager, said: "The achievement of such growth confirms that trustees of church charitable trusts welcome the added choice and diversification that the property fund provides."

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