Cushman & Wakefield Investors has withdrawn from advising segregated indirect property mandates. CWI is the second fund manager to close down its segregated multi-manager recent decision to quit this market.
Both had relatively small businesses: CWI had five mandates, with total assets under management of around £90m; Henderson had nine, totalling £195.5m. A mandate to advise Police Mutual on its £42m indirect property investments was CWI’s largest contract and has been transferred to Aviva Investors.
David Rendall, CWI’s France- based European CEO, said: “At the end of last year CWI decided to consolidate its operations, refocusing on separate accounts on the direct side and co-mingled funds. “As a consequence, we exited from five indirect mandates including Police Mutual, which we ran from Q4 2005, and with whom we had a very good relationship.”
Henderson’s and CWI’s moves out of the market are seen as symptomatic of investment managers’ difficulties in trying to make profits on mandates without having enough assets under management. John Gellatly, head of real estate multi-manager at Aviva, who will manage the portfolio, oversees 25 segregated and pooled fund-of-fund clients with £5bn under management.
He said: “Generally, property business revenue has shrunk while values have fallen and costs have gone up because of more due diligence, regulation and reporting, which requires bigger teams and systems. This has been squeezing profit margins.”