Fund management firm CCLA is to set up a property fund for charities.
The COIF Charities Property Fund will be a pooled fund consisting of 25 commercial properties with a total value of around £50 million, and an estimated yield of 5.5 to 6 per cent a year.
CCLA managing director Andrew Gibbs said the new fund was "a sensible alternative to equities and bonds". He added: "It is intended for all charities seeking a long-term investment. Property is illiquid. It is for a proportion of a charity's long-term capital."
The minimum initial investment will be £10,000 and is intended for charities with at least £100,000 of long-term investment capital.
CCLA is the second fund management firm to set up a dedicated property fund for charities. In September 2000, Carr Sheppards Crosthwaite %26 Savills Fund Management launched its own Charities Property Fund, which is expected to have more than £50 million under investment by June. "CCLA's new fund demonstrates that property is an exciting prospect for charity investors,
said Alison Puhar, director at Savills Fund Management.
Property has been the best performing asset class over the past five years and has been promoted as "the fourth asset class
as a means of spreading risk in a portfolio in the context of a weak equities market.
According to figures from the WM company, a financial data analyst, property yields grew by 6.2 per cent during 2001 compared to a fall of 14.7 per cent in equities.
The basis of CCLA's property fund will be the property portfolio of its own COIF Charities Investment Fund, 5 per cent of which is invested in property. Initially the Investment Fund will be the major investor in the property fund.
A launch date has yet to be set for the property fund. The fund is to be registered as a charity and a Scheme is being set up by the Charity Commission.