Resolution Capital has rolled out its new Resolution Capital Real Assets Fund, with a new strategy allowing for up to half of its portfolio by gross asset value to be invested in Australian-listed infrastructure securities.
The fund is the result of a rebrand and shift of Resolution’s former Core Plus Property Securities Fund, after it gained unitholder approval to change its investment strategy.
Around half of the fund’s portfolio by gross asset value will continue to be invested in Australian Real Investment Trusts (A-REITs).
Resolution Capital chief investment officer Andrew Parsons said expanding the fund’s investment universe to include listed infrastructure securities is likely to improve the diversification and the risk-adjusted return profile of the fund.
“We have been investing in A-REITs since 1995 and will continue our strong track record. We view our real assets strategy as a natural evolution of the mandate,” Mr Parsons said.
“In 2005 we added the ability to invest in select global real estate securities to the mandate to reduce concentration risk within the A-REIT sector.
“We expect the addition of ALI with its monopolistic characteristics, underpinning reliable earnings growth will similarly result in better investment outcomes for our clients.”
He added Australia is one of the fastest-growing developed countries, with two elements underpinning its growth are property and infrastructure.
“We believe the best way for investors to gain exposure to Australia’s growth and urbanisation is through a diverse portfolio of high-quality A-REITs and Australian listed infrastructure,” Mr Parsons said.
“Australia’s growth and urbanisation is an opportunity the Resolution Capital Real Assets Fund aims to exploit in order to generate annual total investor returns exceeding the S&P/ASX 300 AREIT Accumulation Index, but with improved diversification.
“Our investment in the offices, roads, warehouses, airports, pipelines and shops, that underpin our nation is an investment we believe all Australians should have the opportunity to be part of.”
The management fees for the fund have also been reduced from 0.7 per cent per annum to 0.65 per cent per annum, although there have been no changes to how the performance fee is calculated.
The listed infrastructure strategy will only apply to the new fund, Resolution said, with no changes to any of its other funds.