Client: Morden College
Morden College owns a £100 million property fund with investments spread across a range of sectors including offices, industrial and retail.
Morden College appointed Gerald Eve as its fund investment and asset manager with the remit to review its existing portfolio and advise on an investment and asset management strategy to generate optimum yield and capital value from its assets.
A client team comprising fund managers, investment specialists, financial and research analysts, asset managers and planning and development surveyors carried out a comprehensive review of the existing portfolio and its returns profile. We identified and recommended a strategic investment philosophy for the client to optimise the portfolio return in the future.
Background
The college's portfolio was spread across a range of sectors without there being a direct alignment between risk, returns and industry forecasts. The total size of the portfolio also didn't permit actual risk hedging through industry diversification.
The solution
Our recommendations identified six key areas against which client specific investment requirements could be judged to inform the ongoing investment philosophy. Against these criteria we identified a selection of existing assets for ‘immediate disposal’. Others were identified as ‘keep under review’ and the balance as ‘hold’ properties. We implemented a disposal programme for the ‘immediate disposal’ assets and, whilst ensuring that the interim income yield to the client was maintained, we sought to identify specific acquisition opportunities that represented the most appropriate balance between risk and return. This involved consideration being given to acquisitions in ‘alternative’ property sectors.
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