TIME:Commercial Long Income has reached over £400m assets under management (AUM). The Citywire AAA rated fund, which has raised over £250m over the past 12 months has been driven by investors increasingly looking to de-risk their portfolios and rotate capital into a more defensive fund which provides consistent income with lower volatility through a diversified portfolio of commercial long income properties.
Now in its sixth year, the daily-dealt fund has generated a total return, for the twelve-month period to 30 September 2019 of 4.39% which is consistent with previous years and inclusive of income of 3.37% and capital growth of 1.02%
The move towards less volatile, lower risk investments is evidenced by research conducted by TIME Investments: one quarter (23%) of wealth managers and financial advisers said clients are keen to de-risk their investment portfolios. Three quarters of advisers cited concerns over the Brexit outcome as the main driver for de-risking when asked to rank several different factors. This was followed by stock market volatility (48%), the global economic outlook (35%), concerns over the geopolitical outlook (26%), real fear of financial loss (26%), concern over rising interest rates (12%) and concerns over rising inflation (6%).
The fund acquires its largest asset to date in a new sector
The fund has acquired its first office property a commercial freehold – the 154,000 sq ft Temple Quay House in Bristol, which is its largest acquisition to date at £73m. The building is let to the Secretary of State, Communities and Local Government (UK Government) for 18 years with no breaks, providing an exceptionally strong covenant.
This brings the number of investments in long income properties in the UK to 79 across a range of sectors including supermarkets, hotels, leisure and healthcare, with a total annual rental income of £16 million. The freehold portfolio has a weighted average lease length of around 46 years and over 96% of the current portfolio has rental uplifts with a degree of inflation protection.
Long income property provides investors with greater certainty of income than more traditional property investments. The fund invests in both long leases and ground rents, the combination of which serves to optimise the performance, reduce volatility and mitigate risk at the portfolio level.
Nigel Ashfield, Fund Manager of TIME:Commercial Long Income comments: “There is no doubt that we are benefiting from investors seeking exposure to investments capable of outperforming in volatile and down trending markets. With no end in sight to the political and economic uncertainty, we expect this trend to continue for some time.”
Mark Spendlove, at IPP Group said: “Long income commercial property offers the potential to deliver income over the long-term without the volatility associated with some traditional real estate investments and equities. We are increasingly recommending this option to our clients who wish to de-risk some or part of their portfolio.”
TIME’s income funds are accessible through most platforms, including Aviva, Old Mutual, Aegon and Standard Life.
The minimum investment for retail investors is £5,000. The funds have an initial fee and an annual management charge of 1%. Investors are able to access TIME:Commercial Long Income through ISAs, SIPPs, SSASs and offshore bonds via income or accumulation shares and most platforms.Posted: 04/10/2019 Categories: News