The completion of an index upon which property derivatives can be traded should catalyse trading activity in the local market, according to a structured credit specialist.
“;There has been a lack of an index for property derivatives. The last few years have been spent refining data and making it relevant,”; Nell Hutton, GoldmanSachs JBWere executive director fixed income currency and commodities, said of the property derivatives index formulated by the Investment Property Databank (IPD). “;Now that it’s been licenced we expect a lot of interest in property derivatives.”; Speaking at the Investment and Financial Services Association annual conference last week, Hutton said the property derivatives market was based on benchmark indices formulated by the IPD. She said the Australian IPD index was first launched in 2005 and stores information dating back to 1984. It is largely comprised of three property categories: office, 35.9 per cent; industrial, 6.8 per cent; and retail, 56 per cent. “;There is a growing interest in property derivatives. Investors want access to property but don’t want the transaction costs that you get through direct property.”; Hutton said the derivatives, which are built like a total return note or an index-linked note, could generate returns comparable to those yielded through a direct property portfolio but did not carry the associated manager costs.
Insignia Financial has shifted to outsource administration of its $180 billion superannuation assets, inking a deal with SS&C and reassigning 1300 workers to the service provider during the process. The decision stands in stark contrast to peers such as Aware Super, which recently internalised member services, but CEO Scott Hartley said that option is a “costly exercise”.
Darcy SongDecember 10, 2024
