It is the intention of this fund to invest into direct real estate assets however the fund is also permitted to invest in indirect property investments such as Public Securities, Government Securities, Derivatives, Units/Shares in Collective Investment Schemes and joint venture arrangements geared towards a specific real estate investment plan. Leveraging shall not exceed 40% of the funds Gross Asset Value at the time of drawdown. The fund can only invest in properties located within Great Britain or indirect property investments where the core underlying investment is GB real estate related. The fund will not invest in speculative development. When a fund is leveraged it means that gains and losses will be multiplied.
The Market: Over a year since the EU ("Brexit") Referendum and still none the wiser as to what the outcome or impact will actually look like. The economic fundamentals have remained robust, with unemployment at historically low levels and the economy is continuing to report growth, albeit at a slowing pace. The fluctuating currency has helped UK exporters and the weaker Pound has boosted overseas visitor spending, but is of concern to local UK residents. FX losses of -3.1% vs Euro and -10.7% v US Dollar have been experienced over the nine months to 30th September. Although this has tempered UK consumer confidence and retail sales volumes, both economic indicators remain well above their long term average. There has been significant Chinese and US equity investment in the London property market throughout 2017 demonstrating the long-term belief in the strength of the economy despite Brexit. There is also positive news in the occupier market. In the first half of 2017, the volume of leasing activity in the central London office market was 25% higher than the 10-year average. Prime yields have remained stable for the third quarter this year, with some sectors (including industrial and retail warehousing) trending positive. The Fund: The values of the four properties in the Fund remained stable, demonstrating how robust they are relative to the perceived uncertainty in the UK at present. Following significant effort by Friends First, the two Bromley properties in the UK Select Property Fund were sold during the summer at a 45% premium over their carrying values which was very positive for the Fund. Due diligence is currently underway on new investment opportunities for the proceeds, which we expect will be invested in listed UK property during Q4. The Fund returned 10.2% for the first nine months of the year, over which time there was an FX loss of 3.1%. The initial yield is very strong at 6.9% (on property value), and the portfolio is fully let. The weighted average lease term is circa 6 years and 5 months, with 69% of income in place for five years or more (on a worst case basis, if all break options are exercised). The remaining properties in the Fund include a number of core and "core +" properties which are let on high quality, institutional-strength leases. These include the B&Q warehouse in Scotland that was purchased in 2015 (through debt and equity) and the industrial unit let to Downhole in Aberdeen, with almost 12 years remaining on the lease. The performance of the Fund is anchored by this type of strong, income-generating property. In addition, the Fund invests in value-add properties, where we aim to unlock embedded capital value through active asset management. An example of this is Victoria House in Belfast which is multi let and includes tenants such as Arthur Cox and AON. (30 Sept 2017)
0.75% pa of fund assets. Please refer to policy conditions for policy charges.
Properties as at 30/09/2017
Downhole prods (Industrial)
Crieff Road, Perth
B&Q plc (Retail Warehouse)
JLT Mgmt Services (Offices)
Victoria House 15-17 Gloucester St Belfast
Oracle, Arthur Cox, AON Mc Millen, Zurich & oth (Office)
Unexpired Lease Duration as at 30/09/2017
Sector Breakdown as at 30/09/2017
This fund should be considered as being a medium-long term investment. Access to your investment in this fund may in periods of adverse investment conditions be restricted for up to six months. Should the fund become leveraged, this will result in leveraged/geared returns which will mean that gains and losses will be multiplied. Asset Information source: Friends First, unless otherwise stated. Performance figures are as per 'price date'. * Fund size refers to assets under management in underlying fund. The returns shown include the reinvestment of net income and are net of trading costs and management fees but before other insurance contract charges and as such do not represent the returns on insurance contracts linked to these funds. Details of all charges for a particular product are available on request. The information in this document does not constitute investment advice. It does not take into account the investment objectives, financial position or needs of any particular investor. Before making an investment decision, you should consult suitably qualified and independent investment, taxation, and regulatory advisors to discuss your specific situation and investment objectives. The investment strategies and risk profiles outlined in this document may not be suitable for your specific investment needs.
Warning: Past performance is not a reliable guide to future performance. Warning: The value of your investment may go down as well as up. Warning: Funds may be affected by changes in currency exchange rates. Warning: If you invest in this product you may lose some or all of the money you invest.
The information provided is intended for use by retail investment customers and is based on our understanding of current law and revenue practice.
Fund Performance To Date
Fund 1 mth
Warning: Past performance is not a reliable guide to future performance.
Warning: The value of your investment may go down as well as up.
Warning: Funds may be affected by changes in currency exchange rates.
Warning: If you invest in this product you may lose some or all of the money you invest.
Performance Fees: The growth of the Insight Currency fund will be subject to a 20% monthly performance fee
only applies when the growth rate exceeds 7% p.a. The Market Neutral Equity fund will be subject to a
fee of 10% of any growth achieved above cash returns (specifically 3-month EURIBID).
The price protection on the Protected Equity+ Fund, Series 3 is provided by Deutsche Bank AG.
Money invested in the Deposit fund is placed with one or more Banks. The payment of interest and security of
capital is provided by the Bank(s). The Bank(s) and not Friends First are providing the security on the
fund. Please refer to the Fund Factsheet.
The property fund managers reserve the right to place a withdrawal limit or/and to defer encashment for up
six months or such time as is necessary to facilitate the sale of assets if required.