Active managers lead way in LPT review

TheInvestorWebresearch group has released its latest review of the listed property trust (LPT) asset class, adding five new managers to its recommended list and urging investors to stick to active management in the sector.

The five new recommended managers areBTPrincipal,Credit Suisse,ING,Merrill LynchandUBS, all active LPT sector managers.

They joinMacquarieand APN, also active managers, which were already recommended by InvestorWeb.

BT Principal, Credit Suisse and ING all saw their ratings by InvestorWeb upgraded as part of the review to make the recommended list. The rating of Portfolio Partners was also upgraded — from ‘sell’ to ‘investment grade’ — but the group did not make the recommended list.

By contrast,Advance,Australian Unity,HSBC,SagittaandZurichwere all downgraded in the review, although only Australian Unity was given a ‘sell’ rating. Macquarie was also downgraded — from ‘exceptional buy’ to ‘strong buy’ — but kept its place on InvestorWeb’s recommended list.

InvestorWeb head of managed funds Martin Kerr says, on the whole, active managers assessed by the group added value to listed property portfolios, making active management the “preferred investment style for investors seeking an exposure to listed property”.

“Opportunities to add value within the listed property sector exist and can be exploited by appropriately skilled investment teams,” he says.

The listed property sector has been one of the most impressive asset classes over the last two years, returning 14.9 per cent in the 2002 financial year and 13.9 per cent in 2001, according to InvestorWeb.

InvestorWeb says the short-term outlook for LPTs remains positive, although the sector is not without risks.

“Pressure from a higher interest rate environment and improvements in the outlook for share markets may cause investors to move out of listed property and into equities, thereby restraining the longer-term outlook for listed property,” the research group says.