UK 鈥� Hermes, the asset manager owned by the BT Pension Scheme, has restructured its real estate team in a bid to increase its market savvy.
Under the new structure, dedicated fund managers will narrow their focus to concentrate on specific sub-sectors. The result will be to increase market awareness by better combining strategic thinking from fund managers and bottom-up asset-specific skills from recently appointed tactical asset managers, claimed the firm.
鈥淗istorically 鈥� and this is the case in most institutions 鈥� fund managers have covered a number of different sectors, which means that they never know enough about one sub-sector to be able to call themselves an expert,鈥� said Rupert Clarke, head of real estate at Hermes.
鈥淲e have a big enough portfolio to be able to give our fund managers responsibility for specific sub-sectors. They鈥檒l still be handling around 拢1bn in assets but it means that they鈥檒l have a better idea of major players in a sub-sector and that they鈥檒l really know what鈥檚 going on.鈥�
With the structural shake-up has gone a name change from 鈥楬ermes Property Asset Management鈥� to 鈥楬ermes Real Estate Investment Management鈥�. The idea is to switch the emphasis from bricks and mortar towards real estate as a financial investment, said Clarke.
鈥淩eal estate is certainly a more acceptable investment medium than it was 10 years ago 鈥� partly because it鈥檚 fashionable and partly because equities are turning out to be less attractive than people thought they were,鈥� said Clarke.
鈥淲e certainly wouldn鈥檛 claim that property鈥檚 prospects will be wonderful forever more, and there will come a time when it will not perform as well as equities,鈥� he added. 鈥淏ut real estate clearly having a good run as the top performer out of all asset classes over three, five and 10 years.鈥�
