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UK Asset Managers’ Representative Body Creates Property Sector

Nick Parmee

12 November 2008

The Investment Management Association’s Performance Category Review Committee has created a property sector.  It will encompass all types of UK authorised funds investing in property, including direct property funds and property securities funds, starting on 1 January 2009.

Monitoring will begin after the first quarter, allowing a grace period for setting up reporting systems and settling technical points that arise. 

Certain fund styles, which firms can self-elect, will be flagged to let investors and their advisors identify sub-groups of funds:  Property Fund of Funds; Direct Property; Property Securities; and Hybrid.  Funds can cover any geographic region.

To qualify, funds must invest at least 60 per cent of their assets directly in property or invest at least 80 per cent of their assets in property securities; when their direct property holdings fall below the 60 per cent threshold for a period of more than six months, they must invest sufficient of the balance of their assets in property securities to ensure that at least 80 per cent of the fund is invested in property, whereupon it becomes a hybrid fund.