Investments  

Trust manager on why he doesn’t fear a Corbyn government

Trust manager on why he doesn’t fear a Corbyn government

Harry Hyman, who runs the £836m Primary Health Properties investment trust, has said he is confident his fund can avoid being affected by a Jeremy Corbyn-led government.

Primary Health Properties has, for more than 20 years, invested in UK GP surgeries and other medical facilities with the vast bulk of the income coming from rents paid by the National Health Service (NHS) for the use of the buildings.

The Labour Party under its leader Jeremy Corbyn has expressed a wish to end Private Finance Initiative (PFI) contracts and to nationalise other areas of the economy.

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Mr Hyman said he has been "lobbying" senior members of the Labour shadow cabinet to emphasise the differences between what his trust does, and the assets which have come under political scrutiny.

He said his trust funds the construction of services that are needed and that can remain in use for decades so he believed his fund "would be a long way down the list of priorities" for a Corbyn-led government.

He said Primary Health Properties differed from PFI because at the end of the lease the fund retains ownership of the underlying asset, whereas with PFI projects the asset reverts to government ownership at the end.

The average lease length for a property owned by the trust is 14 years and Mr Hyman said he has begun to diversify away from the UK by investing in Irish healthcare centres.

Peter Elston, chief investment officer at Seneca, has been keen on alternative income assets but has reduced exposure to them as he expected interest rates to rise.

Higher interest rates would be expected to but bond yields up which means the income obtained from government bonds should rise. That would reduce the attractiveness of alternative income assets as the gap between the income paid by those products and on bonds reduces.

Mr Hyman said theoretically this was true but he was sceptical interest rates would rise at a fast pace because of the chronic level of political uncertainty surrounding the Brexit negotiations.

He added that his trust had been able to increase its dividend for each of the past 22 years.

Martin Walker, UK equities fund manager at Invesco, said a Corbyn government would have implications for many of the companies listed on the UK stock market.

But he said the negativity around the UK economy was such that the share prices already reflect substantial negativity.

Guy Stephens, technical investment director at wealth manager Rowan Dartington said investors should keep politics in perspective and focus on the worth of the underlying investments.

He said the "market, not the media" is the relevant guide to the consequences of politics for investors.  

david.thorpe@ft.com