17th November 2017
by Joe Hime
The fundraising landscape of the past year has seen continued growth of the long-income sector. You may have read in Property Week how pension funds' demand for secure income has been the driving force of an annual growth rate of 42% in the sector. A number of reasons sit behind this trend, a core reason being the desire for a source of secure income in the context of a low interest rate environment.
We’ve observed two specific areas of growth, namely REITs and “open-ended” real estate funds. On the REIT side we are twelve months into a mini boom on this side and Langham Hall alone has picked up half a dozen new clients in this space. Although the market is showing signs of fatigue, a number of other prospective REIT prospects are on the drawing board and likely to take advantage of strong stock markets propped up by the weakness of sterling.
The popularity of open-ended structures (typically quarterly dealing) is underpinned by a few key characteristics. The increased level of liquidity compared to closed-ended structures, providing more control and flexible cash-flows with the added bonus of a lower fee burden than closed-ended structures. Additionally, these structures tend to focus on core or core-plus assets, matching the market demand for longer-term, steady income. Fund managers also view this trend as an opportunity to diversify their portfolios, in turn allowing investors to invest larger amounts with a reduced number of managers. One of the ongoing debates we have been involved with via INREV is the NAV where people are using an INREV NAV which was never really designed for trading. Much work is being invested here in conjunction with AREF.
Langham Hall continues to respond to these market trends and we are delighted to announce that the FCA has awarded Langham Hall’s depositary business an extension to its permissions to enable us to act as a full scope depositary for unauthorised AIFs. i.e. Langham Hall can provide its depositary services to open-ended funds. Currently Langham Hall depositary acts for over 90 AIFs overseeing $50bn+ of assets for EU and non-EU debt, infrastructure, private equity and real estate managers. As the long-income drive continues, Langham Hall’s integrated depositary, administration, company secretarial and host-AIFM services remain very much in demand, and we move towards the end of 2017 with real momentum across the firm.
Joe Hime, Langham Hall's Head of Depositary, commented, "Langham Hall’s depositary business has experienced very pleasing growth in the past 12 months. The addition of the full-scope depositary licence adds another important element to our service offering and will help drive further growth of the depositary business.”
Managing Partner, Rob Short added, “A fundamental characteristic of Langham Hall is our ability to be adaptable and to provide high-quality solutions to client demands. The addition of the full-scope depositary licence is a further example of Langham Hall’s ability to track and provide solutions to market trends, showing flexibility whilst maintaining high standards across our client work. ”
For more information regarding our depositary services please contact:
Joe Hime - Head of Depositary
T. +44 (0)20 3597 7969