BT Investment Management is taking on additional risk to benefit from the “cheap” valuations of more volatile Australian real estate trusts, said Peter Davidson, head of property securities at the fund manager.

BT, which holds about A$1.5bn in its property funds, is accumulating a “satellite” of stocks with higher leverage and lower quality assets, Davidson said.

“We’ve got a greater risk appetite now,” he said in an interview yesterday. “In 2007, risk got too expensive. Now risk is a bit cheap.”