Versus Capital Advisors LLC launched a mutual fund providing access to the direct real estate asset class. The fund is designed to make institutional commercial real estate
funds controlled by the likes of AEW, JPMorgan, Heitman, Invesco, UBS and others accessible to more than just the well-heeled investors with $5 million to invest.
The Versus Capital Multi-Manager Real Estate Income Fund will utilize a multi-manager structure and intends to invest with a number of institutional investment managers that were screened and approved by Versus Capital and its sub-adviser, Callan Associates Inc.
The fund is initially looking to raise up to $750 million through the sale of shares in the mutual fund going for $25/share. Under normal market conditions, the fund will invest at least 80% of its capital in real estate-related Investments. The fund will seek to invest in investment funds that invest in real estate through investment vehicles structured as private REITs.
By the time the fund is fully invested, it will invest more than 50% of its assets in investment funds. The balance of the fund will be invested by certain of the investment managers in real estate securities.
Until now, these managers and their private real estate funds were available to institutional investors that met certain investment minimums, many of them requiring $5 million or more. With daily net asset values, quarterly liquidity, no upfront sales load and no K-1s, Versus Capital's Fund provides individual investors with transparent access to direct real estate for far smaller sums.
The fund is designed to serve as a core real estate holding, focused primarily on income producing core and core plus direct real estate funds. The fund's primary investment objective is to seek consistent current income, while the fund's secondary objectives are capital preservation and long-term capital appreciation. An investment in the fund involves risk.
"We believe that owning direct real estate is a crucial part of a well-diversified portfolio and that individual investors deserve access to the best managers in an investor friendly structure," said Mark Quam, CEO of Versus Capital. "We developed the fund to give investors direct access to core real estate funds sponsored by our approved institutional managers. Equally important was registering the fund under the Investment Company Act of 1940, adding transparency, increasing liquidity and lowering the costs typically associated with direct real estate investments."
The fund's investment strategy is to diversify the overall real estate-related investment portfolio by:
Geography: asset holdings primarily in the United States but with certain holdings across the rest of North America, Europe, Asia, Australia and other geographic regions;
Property Type: investments in multifamily, industrial, office, retail, hotel and other property types;
Strategy: differing property and securities acquisition, underwriting, leverage and management strategies, policies and procedures; and
Capital Structure: investments that include debt, preferred stock and equity securities.
Callan provided a list of already approved institutional asset managers to consider in connection with investing fund assets. The list of approved managers is as follows:
AEW Capital Management LP was founded in 1981, and provides real estate
investment management services to investors worldwide.
Cornerstone Real Estate Advisers LLC was founded in 1994 to manage Massachusetts Mutual Life Insurance Co.'s equity real estate investments.
Dexus Property Group an Australian REIT that manages office, industrial and retail properties in Australia, New Zealand, the U.S., Canada, France, and Germany.
European Investors Inc. has more 25 years of experience investing in commercial real estate and offers domestic, international, regional and global real estate securities capabilities.
Forum Securities Ltd. was formed in 2009 following the integration of the global real estate securities team of Citi Property Investors with Forum Partners Investment Management. Forum's real estate securities team currently offers a global diversified REIT product, global alpha REIT product, global income product, liquid core product and an emerging markets real estate strategy.
Heitman Capital Management is a multi-national real estate investment management firm focused on direct investments in real estate, both in the U.S. and Europe; investments in publicly- securities, REITs, real estate operating companies and other real estate companies in the U.S., Europe and Asia; and origination and servicing of debt secured by real estate.
Invesco Real Estate is a wholly owned subsidiary of Invesco Ltd., a publicly traded holding company. Invesco Real Estate offers a variety of equity real estate strategies (public and private), both domestic and international, which vary by strategy and vehicle.
JP Morgan Real Estate, within J.P. Morgan Asset Management, is one of the oldest and largest real estate investment organizations in the world. The group manages real assets on a global basis in both public and private strategies and has about 370 employees globally with offices in North America, Asia and Europe.
Security Capital Research & Management Inc. is an investment adviser with a focus on investments in real estate securities. Investments are undertaken through the open market purchase of real estate securities as well as through the negotiation and structuring of convertible preferred private placements.
UBS Global Real Estate (UBS Realty) has provided a wide array of real estate investment management services to clients, including pension funds, public employee retirement systems, foundations, offshore and private investors.
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