BMO adds US property fund after 2016 soft-closure

BMO adds US property fund after 2016 soft-closure
Aidan Crawley/Bloomberg

BMO Global Asset Management is to add a US long/short property equity fund to its range after soft-closing a global strategy last spring.

The firm shut the £250m F&C Real Estate Equity Long/Short offering to new investors last May, but will now complement it with a purely US-focused strategy. 

The existing vehicle is predominantly Europe-focused, with a 17 per cent exposure to the US. The latter region’s larger investable universe should enable the new fund to invest more broadly despite the geographical restriction, BMO said.

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The market-neutral fund will target similar return and volatility metrics as its global peer, and will also be run by head of property investment Marcus Phayre-Mudge. Alban Lhonneur and Dan Winterbottom will accompany him as fund manager and assistant fund manager, respectively.

The BMO US Real Estate Equity Long/Short fund, launching in the second quarter, will target annual returns of 5-6 per cent with volatility of 2-3 per cent. 

The global version of the strategy achieved 5 per cent annual returns in the past three years, the firm added.

Fees have not yet been disclosed, but the existing strategy has an ongoing charges figure of 1.28 per cent, as well as a 15 per cent performance fee.