New Star has launched the New Star Real Estate Hedge Fund, which will invest in listed real estate securities and may also use sector swaps, real estate funds and real estate derivatives.
New Star has launched the New Star Real Estate Hedge Fund, which will invest in listed real estate securities and may also use sector swaps, real estate funds and real estate derivatives. The fund is managed by recent recruit Robin White, who has specialised in real estate securities investment for the past 14 years.
White recently joined New Star from Rock Capital, where he managed the long/short Rock Real Estate Securities from launch in July 2006 to May this year, generating an annualised return of 22.4 per cent to the end of May with no down months.
White was previously at UK real estate group Liberty International, managing both long-only and long/short real estate securities. The Liberty long/short portfolio produced an annualised return of 17.2 per cent over the five years to December 2004, the firm says.
The New Star Real Estate Hedge fund invests in real estate securities, on a global basis with a pan-European focus and a targeted portfolio size of between 30 and 60 positions. The Fund may also use sector swaps, real estate funds and real estate derivatives.
The fund’s core investible universe comprises more than 350 securities with a market capitalisation of USD400bn, out of a global listed real estate securities market exceeding USD2trn.
The fund seeks to provide investors with absolute returns throughout different real estate cycles. The fund’s long/short strategy seeks to exploit these cyclical movements and pricing inefficiencies in a wide range of real estate markets and sub-sectors.
The fund will not use excessive gearing but expects to maintain a gross exposure in excess of 100 per cent and, in view of the recent sell-off in European real estate securities, is likely to have an initial net long exposure in the region of 30 per cent.
At New Star, White is supported by the 24-strong pan-European equity team and the 13-strong direct real estate team. Hw also has access to around 2,500 company meetings a year at New Star’s offices and a variety of information and research directly from major real estate participants.
‘Real estate securities differ from direct real estate in that they display greater volatility and are influenced by company-specific factors and wider stock market sentiment,’ White says. ‘Recent turbulence in real estate securities has produced a number of opportunities on a pan-European basis that should allow us to generate positive returns for investors regardless of the general direction of equity or direct real estate markets.’
New Star was founded in 2000 by John Duffield and now employs 372 people, of whom 79 are investment professionals, with total funds under management of USD49.2bn at the end of September. The firm, which has a market value of USD1.9bn, is just over 35 per cent owned by its staff.
