Pathfinder banks on property

Pathfinder has passed the $100 million mark in funds under management and launched its fourth fund.

Monday, July 27th 2015, 6:46AM

Its latest offering is focussed on listed global property stocks, which is being seeded by a financial planning firm.

It will directly invest in around 80 listed companies and property trusts from 10 countries (including four listed in New Zealand).

Pathfinder director John Berry says property is a distinct asset class that can help investors diversify share and bond portfolios.

“Property is recognised as providing long term capital growth and income generation, and is seen as an inflation hedge.”

Berry says that investors “continue to search for investments that have an income element and can diversify portfolios. Global listed property meets these needs.”

“The fund sits well with Pathfinder's stated intention of providing NZ investors with simple and cost effective solutions for investing globally.

While the fund has an income element it does not pay distributions but it collects dividends on property stocks, which is then rolled up into the unit price.

Berry says listed property sits between bonds and equities and will likely have its own allocation in most portfolios.

“We expect advisers to use this fund in the same way they would use an exposure to New Zealand listed property. The key advantage is diversification - the New Zealand listed property universe is only eight stocks while the global universe is over 350 stocks. Another advantage is valuation - the New Zealand listed property market is trading at a 12.5% premium to NAV, while elsewhere in the world there is better value. The US, Hong Kong and parts of Europe all trade at a discount.

A number of financial advisers will be using the fund and so far we have over $10m committed to the fund.

Tags: Pathfinder Asset Management