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Templeton Plans To Raise $300M For Property Fund Of Funds

By Reuters

  • 17 Sep 2010

U.S. fund manager Franklin Templeton plans to launch a new Asian property fund of funds and hopes to raise about $300 million from institutional investors in Europe and Australia, a company official said on Thursday.

The new fund, which will invest across the Asia-Pacific region, aims to deliver investors an annualised return of 15 percent after taxes and fees, said Glenn U'ren, a managing director at Franklin Templeton Real Estate Advisors.

Franklin Templeton Real Estate Advisors, which has about $4.5 billion invested with about 90 funds globally, will earn performance fees if net returns exceed 10 percent.

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U'ren said Franklin Templeton was currently looking to park money with private equity funds that specialise in buying non-performing loans tied to property investments in Japan.

Another area of interest was mass residential housing in China and India aimed at young and mid-level executives, while a third strategy was "asset repositioning" which involved buying poorly managed or poorly designed commercial property that the manager could improve.

"After 12 months, new strategies could arise," he said.

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U'ren added that he was wary of "high-end residential in any of China's coastal cities", given the sharp run-up in prices over the past 2-3 years.

But while segments of China's real estate market appeared bubbly, there may not be a sharp correction as many investors had deep pockets and could ride out a downturn in the property market, he said.

"Unless you have to give your keys back to the bank, you are still in the game."

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