New property fund manager Pentacle will target self-managed superannuation fund investors via a partnership with four Queensland-based dealer groups.
Core Concepts, Financial Index Australia, CFL and Wealth Retirement Solutions (the planning arm of Supa-Funds Management) have agreed to recommend Pentacle products to meet growing interest from do-it-yourself investors in diversified unlisted property trusts.
The deal gives retail investors access to the funds of large property managers, such Macquarie Goodman, Centro, Investa, Lend Lease and Salta, without the need for high minimum investment levels.
The funds are designed to achieve a return of 9.5 per cent a year after fees and offer tax breaks, low volatility and liquidity. The minimum investment is $50,000.
Financial planners had traditionally stayed away from recommending unlisted property trusts due to liquidity concerns, but this partnership offered diversification for investors keen to capitalise on new super rules, Pentacle director Rohan Kerr said.
“There are still a lot of dealer groups that are hesitant to deal with direct property. The biggest issue is liquidity. [The deal] opens the door for financial planners,” Kerr said.
He rejected concerns about the spectre of the Westpoint collapse still looming over the involvement of financial planners in the direct property market.
“Our investment committee are very experienced in the property sector – they have an incredible amount of experience. Westpoint wouldn’t even come up on our radar. If you did have one bad egg and it fell over the effect would be miniscule,” he said.
In July, Pentacle announced the creation of two unlisted property funds that addressed liquidity concerns.
Kerr said negotiations were continuing with four more dealer groups based in Sydney and Melbourne and a partnership would be announced in 2007.
