Specialist fund management firm Rudolf Wolff has launched a Central London Commercial Property fund aiming to produce a net annual income of up to 7%.
The Luxembourg domiciled Sicav invests in London properties with strong anchor tenants, with the objective of generating both income and capital growth. It has annual targets of between 5% and 7% net income and 15% to 20% total returns. The target maturity of the portfolio is five to seven years.
Running the fund are former Dawnay Day managers Robert Hacking-Brian, Ian Besley and Anthony Farrant. They believe now is the best time in two generations to invest in a portfolio of investment grade Central London property. Holdings include properties on Park Lane, Grosvenor Gardens and Westminster.
The managers says they are used to working in difficult market conditions as well as bull markets, and two of the three have experienced recessionary markets in each of the four decades since 1970.
Hacking-Brian adds the team has strong links with leading London estate agents, allowing it to negotiate off-market deals when required.
Despite an uncertain outlook for the UK property market, Hacking-Brian says Rudolf Wolff has waited until after the Budget to launch the fund, and is confident the "recession-proof" commercial properties of Central London will attract foreign investors, ensuring a stable future.
"During 2008 and 2009 the Central London market was oversold in anticipation of the high vacancy rates seen in the 1990s recession," says Farrant.
"This overhang has not happened as there were far fewer speculative developments underway at the top of the market. This means we are beginning to see a sharp rebound in both rental and capital values, and seek to capitalise on this trend."
Howard Colvin, the chief executive officer, says the key difference between this fund and its competitors is that Rudolf Wolff is effectively new company with no baggage of failure from the previous cycle.
The Rudolf Wolff brand was relaunched in 2008. The original Rudolf Wolff & Co was established in 1886, becoming a founding member of the London Metal Exchange in 1877.
The minimum investment is €125,000 (£103,000) but the group says this could be lower within wraps. The target fund size is £100m with an initial charge of 5%, annual management charge of 2.5% and a performance fee of 20% per annum of portfolio appreciation above 7.5%.
