A global approach can provide both diversification and lower volatility
Invesco has made its Global Real Estate Fund (GREF) available to UK defined contribution pension schemes via platforms in what is understood to be a first for the market.
The investment manager said a large unnamed pension plan advised by Lane, Clark & Peacock (LCP) had become the first DC scheme to invest in the fund via a platform in September - adding this marked the first time a direct global property fund had been made available to DC schemes through a platform.
It added making this fund available to DC schemes through platforms made it significantly easier for them to invest in the global property market.
Prior to this, Invesco said, most DC investors were limited to investing solely in UK direct property funds.
Invesco said it believes global direct real estate should be considered a core component of DC investment portfolios - helping them diversify away from the UK, which it says is among the most volatile of global real estate markets.
It said GREF offers DC schemes a global approach, providing diversification through the ability to invest in real estate markets that are inherently less volatile, and potentially offering more rewarding income and growth while reducing exposure to single-market shocks such as Brexit.
Invesco Real Estate managing director of global client portfolio management Simon Redman said the move had opened up the DC space to investments in a broader range of assets.
He said: "It is a compelling proposition because the global property market can potentially offer more attractive opportunities and sectors that simply do not exist at scale in the UK.
"Global direct real estate has not experienced the well-publicised challenges that UK property portfolios have suffered over recent years. With this strategy, we are able to allocate to what we believe are the best global sector and market combinations in developed markets worldwide."
LCP partner and DC investment strategy lead Stephen Budge added: "Through the work with Invesco, it now means that DC schemes can have access to the global real estate opportunities that exist beyond a solely UK-focused property portfolio."
