Fat Prophets Global Property Fund LIC
The Fat Prophets Global Property Fund (the Fund) (ASX: FPP) is a listed investment company focussing on investing in undervalued global listed Real Estate Investment Trusts (REITs).
According to Fat Prophets, the Fund will invest in a diversified, high conviction portfolio of global real estate exposures managed by Fat Prophets Funds Management Pty Ltd (the Manager). It will target provision of regular distributions paid to investors on a 6 monthly basis, and capital growth. The Fund will invest in 70-90 stocks from the overall 350 stock benchmark universe. The Fund will only invest in equities in developed markets and will not use leverage, shorting or derivatives.
In a letter to investors, Angus Geddes, CEO of Fat Prophets said: "This new Fund provides Australian investors the opportunity to diversify their equity holdings in Real Estate Investments Trusts (REITs) outside of Australia so they can now have an interest in the entities that own, manage and develop some of the most iconic assets around the world.
Offer opened: 19 July 2017
Offer closed: 22 September 2017
Expected to list on the ASX: Week ending 13 October 2017
Chief Executive Officer, Angus Geddes, and Chief Investment Officer, Simon Wheatley, introduce Fat Prophets newest Listed Investment opportunity: The Global Property Fund (ASX: FPP).
Fat Prophets Global Property Fund: Q&A with CIO Simon Wheatley
- What makes the Fat Prophets Global Property Fund unique to the market?
This is the first Australian Listed Investment Fund (LIC) with a listed Real Estate Strategy. While there are now close to 100 Listed Investment Companies on the ASX, many of them have replicated strategies but none have a strategy of investing in Real Estate Investment Trusts (REITs). Given the REIT sector accounts for a meaningful 6% of the ASX200 Index, this lack of opportunity in the LIC space is a clear market gap which the new fund will fill.
- Why own REITs?
REITs are well known as having a high proportion of their return coming from distribution yield which reflects the rent coming from the assets they own and underpins total return. REITs also have much lower volatility than equities, have their share price supported by tangible assets, and in Australia, REITs have outperformed equities 50% of the time over the last 20 years. This means that from a risk return perspective, REITs have a clear place in a balanced portfolio.