Henderson’s European fund strikes €27m debut UK deals

HIP buys units in Standard Life and Unite funds on secondary market

Henderson Global Investors’ European fund of funds has made its first UK investments. The open-ended Henderson Indirect Property Fund (HIP) bought around €27m of units in Standard Life’s UK Shopping Centre Trust and the Unite UK Student Accommodation Fund on the secondary market. Nick Evans, director of indirect property and manager of the €419m HIP fund, said the combined pricing reflected around a 3-4% discount to net asset value.

The fund bought €11.7m of Unite fund units from a European pension fund looking to cut its allocation; and about €15m in Standard Life’s fund, buying some, but not all the units from the manager’s in-house life fund, which has the largest stake of the 70 or so investors. HIP is an open-ended fund and Evans said these funds’ liquidity, pricing and return suit it. The Unite fund is open-ended and has about 90 investors. “Standard Life is trying to facilitate liquidity in its fund and that is an attraction to us,” he added.

HIP is euro-denominated, and Evans said that sterling’s relative weakness was another  reason to look at these and other potential UK investments. “Guernsey-based, listed, UK investment companies are interesting because of the large discounts to NAV,” he said. He hoped to take the UK weighting from 6% to 10-15% shortly. HIP, which has 20 investors, still has €60m available to invest, including £8.25m that it took in from a UK charity this year. Its last investment before the UK secondaries deal was an extra €20m in Rockspring’s German Retail Box Fund, €14m of which has just been called. Rockspring has spent €62.2m on three retail warehouses, in Neuss, Kassel and Emspark in Leer, which yield just under 7% and take the fund’s assets to 50.

Henderson sheds segregated mandates

Henderson has made alternative arrangements for seven of its nine UK indirect segregated mandates after deciding late last year to quit this area. The decision coincided with the departure of the business’s manager, Des Jarrett, who is taking early retirement.

The mandates have been transferred either to other large multi-managers or back to the trustees, while in some cases the consultants are going to work with their clients directly. Henderson said the former business’s £195.5m funds under management “lacked critical mass”. Nick Evans, Henderson’s director of indirect property, said the manager’s strength is in pooled funds and this would be where future indirect market growth would be focused.