Threadneedle launches UK Property Trust with 4.0% net yield

To meet the growing demand for high yield products, Threadneedle Investments, the fourth largest UK retail investment funds manager, has expanded its range of property products with the launch of its first UK authorised property unit trust, the Threadneedle UK Property Trust.

The Threadneedle UK Property Trust is designed to obtain a total return based on income and capital appreciation primarily through investment in direct property and property-related securities and collective investment schemes.

The Fund can be placed in an ISA, PEP and SIPP with a target net yield of 4.0% at launch.

The Fund is an authorised unit trust and a non-UCITS Retail Scheme, or NURS under the Financial Services Authority's New Collective Investment Scheme Sourcebook, or COLL Sourcebook. The authorisation from the FSA was made effective on 25 January 2007 and the fund is expected to launch in mid-February.

The Fund will be managed by Don Jordison and Chris Morrogh, both are highly experienced members of the Threadneedle Property Team, one of the UK’s leading specialists in property asset management.

Of Threadneedle’s £72 billion in funds under management, the Threadneedle Property Team manage £6.7bn (source: Threadneedle, as at 31 December 2006).

Both Jordison and Morrogh run funds with over one billion pounds in assets under management. Both have delivered exceptionally strong performance to their clients with Jordison having achieved 14 out 16 years of consecutive outperformance, and Morrogh achieving seven out of eight years.

The Threadneedle Property Team has a record of sustained outperformance which can be attributed to an active management investment process that looks at higher yielding assets and stock picking rather than benchmarking.

The managers will apply this successful investment strategy to the Threadneedle UK Property Trust and will look at investment opportunities throughout the entire property market, avoiding super prime investments.

Madeline Forrester, Head of UK Distribution at Threadneedle, commenting on the launch of the Threadneedle UK Property Trust, said: “We are delighted to be launching our first UK authorised property unit trust to retail investors. The Threadneedle Property Team has an impressive track record of managing property assets and we believe that adding this property trust will have a wide appeal for retail investors."

“Commercial property is an effective way to diversify an investor’s long term pension investments particularly within a SIPP. In addition, the change to rules allowing property in ISAs, offers retail investors an opportunity to invest in a more tax efficient manner.”

Don Jordison, fund manager of the Threadneedle UK Property Trust, said: “We have been running the offshore, institutional class Threadneedle Property Fund for ten years now and we are delighted to have delivered exceptionally strong performance and high yield to our clients.

Similarly, this new product will seek higher returns and higher yields by avoiding super prime investments and speculative development. Unlike traditional property funds we believe there is greater scope to add value outside the super prime market.

We think there is a good possibility of double digit returns from the commercial property market this year. We believe that there is a sufficient amount of property in the market which can offer high yield returns without paying the high price demanded of prime investments – it is those areas that we seek to invest in.“