Two of the leading institutional property fund managers, Protego and Threadneedle, are merging their UK funds to provide greater scale and liquidity for investors.
In a rare move among UK property funds the Protego UK Property Fund is to be merged with the Threadneedle Property Unit Trust to create a £400m fund with more than 100 properties.
The rationale for the merger is that a combined fund will provide investors with a larger and more widely diversified portfolio, a lower aggregated total expense ratio and enhanced liquidity for investors.
Threadneedle Property Asset Management will manage the combined fund.
‘Protego considered a number of prospective balanced UK commercial property funds as candidates for a merger,’ said Hugo Llewelyn, head of investment at Protego who formed the fund manager with CEO Iain Reid and Charles Weeks in 2004. ‘Threadneedle Property Unit Trust was chosen as a result of its similar investment strategy to the existing fund, being a core, balanced fund, targeting a higher-than-average income return.’
‘Merging the funds will protect the interest of existing fund investors, who wish to continue their long term strategic allocation to property.’