Four out of 13 global LPT managers get Lonsec nod

Four funds have achieved the top rating in Lonsec’s annual review of the global property securities sector.

EQT SGH LaSalle Global Listed Properties Securities Fund, ING Wholesale Global Property Securities Fund, RREEF Global Property Securities Fund and Perennial Global Property Securities Fund have all been tagged “highly recommended” by the research house, following a review of 13 funds. Paul Pavlidis, senior investment analyst, said that LaSalle, ING and RREEF were distinguished by well-resourced investment teams with managers and analysts of a high calibre, while Perennial was noted for the quality of its deep bottom-up process. He said all four funds were marked by excellent access to global research, whether in-house or through joint-venture partnerships. Although none have escaped the volatility and down-pricing of recent months (the average return for the sector was minus 16.9 per cent in 2007), Pavlidis said that Lonsec believes the top-rated funds have the best chances of achieving their objectives over the investment cycle. Lonsec expects further volatility and pricing pressure in 2008, but forecasts the sector will continue to deliver attractive risk-adjusted returns over the long-term. “We expect a yield of 3-4 per cent, with the capital growth driven by accessing markets not yet developed to make up to 8-10 per cent per annum in total,” he said. Lonsec’s review found the Asian and European teams of most global property securities funds to be under-resourced. “[But] most mangers acknowledge this and are focusing on developing their capabilities in these regions,” Pavlidis said. The size of the average investment team in Lonsec’s review increased from 13 in 2006 to 17 in 2007.