The Genevan private bank Edmond de Rothschild and PI Performance, part of the international property major Richard Ellis, have combined to l...

The Genevan private bank Edmond de Rothschild and PI Performance, part of the international property major Richard Ellis, have combined to launch a global property fund: the LCF Edmond de Rothschild Prifund Alpha Property Securities, a Luxembourg-based fund of funds which has recently been authorised for distribution in Switzerland.

About half the fund will be allocated to Europe, with the balance to North America, Japan and emerging Asia.

The investments will be wide-ranging: property companies (whether listed or not), REITs and ETFs replicating a property index or a basket of property shares, but also property-related hedge funds or private equity funds.

Exposure to hedge funds will be a maximum 30 per cent. The fund, with a relatively cautious strategy, is expected to earn a return of 6 to 12 per cent per annum, with a volatility of 6 per cent.

Alexandre Col, head of the funds department at the bank, said: “For our private and institutional clients, property has always been an essential component when establishing a diversified investment strategy. This is because property only has a weak correlation with the other asset classes. In view of this stabilising effect, the incorporation of real estate assets thus significantly improves the risk-return profile.”

Jean Golinelli, chief executive of PI Performance, said: “Global real estate offers relatively high returns that are more stable than one would think thanks to its geographic diversification. Over the last three years stockmarket listed property has achieved an average annual performance of 28.8 per cent, thus outperforming the stock and bond markets. Hence the benefit of extending investment horizons.”