Fat Prophets floats REIT-focussed listed fund

Wealth management group Fat Prophets is set to launch a listed investment fund with a global focus on real estate investment trusts around the world in a bid to diversify from the local sharemarket, which has dropped 9 percent over the past month.

The group, which has offices in Sydney, London and Auckland, seeks to raise up to $220 million, according to The Australian.

The S&P/ASX 200 A-REIT index has taken a 9 percent hit in the past month as investors fret about a property market slowdown and the negative commentary around it, besides weak wages growth in retail and the looming entry of Amazon.

Fat Prophets said it would allow Australian investors access to global REITs, which would otherwise require direct investing in international markets or unlisted funds.

“This new fund provides Australian investors the opportunity to diversify their equity holdings in REITs outside of Australia,” Fat Prophets chief executive Angus Geddes was quoted as saying by The Australian.

“They can now have an interest in the entities that own, manage and develop some of the most iconic assets around the world.”

The portfolio will be managed by Simon Wheatley, a real estate veteran with more than two decades of experience in listed real estate.

Fat Prophets said the fund could help investors reduce volatility in their portfolio. 

The LIC structure would likely provide more liquidity than a direct real estate investment, with much lower entry and exit costs, they said. 

The fund will be actively managed, typically holding 70 to 90 securities, with the ability to hold up to 15 percent in cash.

Units are on offer for $1.10 each, with the offer closing on September 1 and units to start trading on the ASX on September 13.