Property fund managers to continue M&A
The Australian Direct Property Investment Association’s (ADPIA) most recent industry survey shows that almost 75 per cent of property fund managers are considering merger and acquisition activity over the next 12 months.
“These findings very much reflect what we have seen in past 12 months, where the numbers of both property fund managers and products on offer have dropped by about 30 per cent,” said ADPIA president Robert Olde.
“But we believe that this decline is a result of consolidation to improve negotiating power with the banks and create economies of scale, rather than a case of the managers disappearing altogether.”
Property Investment Research data found that between 2008 and 2009 the number of property fund managers dropped from 260 to 171, while the number of property funds fell from 1043 to 721.
“In light of the above consolidation in the sector, it is pleasing to see that 70 per cent of managers reported that their funds under management either rose or stayed the same,” Olde said.
Almost two-thirds of fund managers stated that securing funding would be the biggest problem for fund managers over the next 12 months. “Until the liquidity problems are fully addressed, investors in our sector will continue to be concerned,” he said.
The survey also found that more than three-quarters of funds managers believed domestic direct property would hold the best opportunities in the next 12 months, and more than half said unlisted direct property funds were on advisers’ agendas.
Recommended for you
Clime Investment Management has welcomed an independent director to its board, which follows a series of recent appointments at the company.
Ethical investment manager Australian Ethical has cited the ongoing challenging market environment for its modest decrease in assets over the latest quarter.
Commentators have said Australian fund managers are less knowledgeable compared with overseas peers when it comes to expanding their range with ETFs and underestimating the competition from passive strategies.
VanEck is to list two ETFs on the ASX next week, one investing in residential mortgage-backed securities and the other in Indian companies.
