Kames set to launch first property fund for retail investors

Kames Capital is set to launch its first property fund for retail investors in the first quarter of 2014.

The 13-strong Kames Capital property team, led by David Wise and Alex Walker, has been managing institutional property funds for years but Kames is now looking to bring its expertise to the retail market with a property authorised investment fund, or Paif.

Mr Walker said the fund would target a distribution yield of 5 per cent through a combination of direct property investment - roughly 80 per cent of assets - and indirect investment in products such as real estate investment trusts, known as Reits.

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Kames said it was actively seeking seed money for the fund now.

The company said the investment strategy for the new fund would look to use the property team’s active value expertise focussing on properties that offer asset management opportunities in the £2m to £10m price bracket.

“These types of properties are often too big for most private buyers and too small for many institutional investors,” the company said.

“In addition to active value style properties, a core property allocation will be maintained for liquidity purposes.”

Property authorised investment funds (Paifs) have become more mainstream this year as a series of the UK’s biggest asset managers lined up at the start of the year to convert funds into the tax-efficient format.

Standard Life Investments has converted its existing ‘bricks and mortar’ fund into a Paif this year.

M&G Investments in January converted its £2.1bn M&G Property Portfolio into a Paif, and Ignis Asset Management has now converted its £952.9m Ignis UK Property fund into the structure too.

Aviva Investors earlier this year said it hoped to complete the conversion of its £1.6bn Property fund - which is run by Philip Nell - to a Paif structure by the end of 2013.