Big Canadian, Australian funds go shopping

The Canada Pension Plan Investment Board (CPPIB) and Australia’s Future Fund have banded together to buy out the majority of investors in a direct property fund.The big institutions bought $673 million in property assets from 10 of the 12 existing investors in an unlisted property fund run by Colonial First State Global Asset Management (CFS GAM), turning the fund into a retail property-focused investment vehicle called the CFS GAM Property Retail Partnership.

The buy-out of existing investors, described in an announcement as a “recapitalisation and restructure”, will see CFS GAM remain as the manager of the fund.

The partnership currently manages $1 billion of investments in regional and sub-regional shopping centres in Australia, and provides the opportunity for other major institutional investors to join in a ‘clubbing’ arrangement.

Darren Steinberg, head of property at CFS GAM, said the diversified portfolio would have less than 20 per cent gearing, and that parent company Colonial First State, a large Australian financial services provider, would not invest in the partnership but would be paid management fees.

At March 31, the Future Fund invested 4 per cent of its $61 billion (excluding Telstra shares) in property. Among its publicised deals is its 50 per cent stake in the $426 million Lakeside Joondalup Shopping City in Perth, acquired through a joint-venture with Australian manager Lend Lease.

The $122 billion CPPIB has an active interest in Australian property, being an 80 per cent shareholder in the $359 million unlisted Goodman Australian Development Fund. Last year, it and the Ontario Teachers Pension Plan unsuccessfully attempted to take over toll road operator Transurban. Each has a 14 per cent stake in the business.

Sponsored Content

Leave a Comment

Sort content by

Disparity in policy portfolio risk profiles

A policy portfolio is a poor reflection of investor preferences, argued Peter Bernstein. This philosophical question has now been empirically tested by MIT’s Mark Kritzman, who shows the inter-temporal disparity of a policy portfolio’s risk profile. He suggests a simple framework for addressing this deficiency. Kritzman encourages investors to replace rigid policy portfolios with flexible investment policies.

Ventures on the risk spectrum

Hershel Harper received an early education in finance when he used to read Business Week in High School. The 43-year old now at the helm of the $27-billion South Carolina Retirement Systems, investing on behalf of South Carolina’s 350,000 public sector workers, says he knew back then he wanted to manage money: “I really am

Getting the commodities mix just right

While commodities are a controversial and problematic asset class to some investors, for others they are an ideal diversifier looking more attractive than ever. A mini-revival in commodity investing among US pension funds suggests the asset class may be enjoying a resurgence. The Los Angeles Fire and Police Pension System, Municipal Retirement System of Michigan

The end of beauty contest active management?

Designing and implementing concentrated, long-horizon investment mandates would support longer term thinking, align pension organisation’s goals with its stakeholders, and reduce transaction costs. This was one of the recommendations of a two-day workshop in Toronto last month, attended by a delegation of 80 pension fund executives from around the globe. Aimed at uncovering the meaning

Italian fund rides out crisis in style

The wrath of the European sovereign debt crisis may have left its mark on Italy in more ways than one, with both its financial and political scenes regularly sliding into crisis mode for the past year or two. However, the nation’s largest private pension investor, the €7.75-billion ($10.1-billion) Cometa fund, has firmly kept on track

Paul Marsh: live with low returns

The London Business School’s emeritus professor of finance Paul Marsh admits that you have to be slightly mad to embark on the kind of research detailed in the latest edition of Global Investment Returns Yearbook. This year Marsh and colleagues Elroy Dimson and Mike Staunton – Marsh describes the three of them, pictured below, as

Previous