MLC increases global property exposure

Citing a shrinking pool of securitisation opportunities in the Australian market and the growing attraction of property trusts in international markets, MLC has increased the global property allocation of its Horizon Series Property Securities Strategy to 100 per cent.

The previous property allocation saw a 25 per cent allocation to global and 75 per cent to Australian property securities.

While several other managers have also increased their allocation to global in recent times, MLC is among the first to implement such an active exposure to global listed property trusts (LPTs).

Pointing to legislative changes in the property sector within economies such as France, Japan and Singapore, Paul Duncan, MLC head of investment strategy, said: “The opportunity today is vastly different to what it was four years ago.”

He said even in domestic LPTs, more than 40 per cent of underlying assets are global.

“Why do it passively? You may as well proactively manage that exposure.

“There’s not a great deal left that can be securitised in Australia,” Duncan said.

Resolution Capital has been appointed to manage 20 per cent of MLC’s Global Property Strategy, with equal funding from incumbent managers LaSalle and Morgan Stanley.

The MLC Property Securities Fund has also been moved to a 100 per cent actively managed strategy, which is expected to provide greater research and mandate flexibility to target higher after fee and after tax returns.