IMA creates Property sector

Following consultation with members, the IMA and PCRC have created a new Property sector. The sector will encompass all types of UK authorised funds investing in property, including direct property funds and property securities funds. The new sector will commence on 1 January 2009. Monitoring will begin after the first quarter, allowing a grace period for setting up reporting systems and settling technical points that arise.

IMA will flag certain fund styles, to permit investors and their advisers to identify certain sub-groups of funds. Firms are permitted to self-elect flags. Available flags are: Property Fund of Funds; Direct Property funds; Property Securities funds; and Hybrid Property funds. Funds may cover any geographic region.

The new sector definition is as follows:

IMA Property sector

Funds which predominantly invest in property. In order to invest "predominantly" in property, funds should either:

invest at least 60% of their assets directly in property; or

invest at least 80% of their assets in property securities; or

when their direct property holdings fall below the 60% threshold for a period of more than 6 months, invest sufficient of the balance of their assets in property securities to ensure that at least 80% of the fund is invested in property, whereupon it becomes a hybrid fund.