La Française launches Global Sustainable Listed Real Estate investment strategy
September 19, 2017, Paris, France

La Française launches Global Sustainable Listed Real Estate investment strategy

Listed real estate markets are predominantly driven by the performance of their underlying assets and public market mispricing. Supporting evidence shows that “Green” real estate can generate more long-term performance and that companies with a strong social orientation and corporate governance tend to deserve a valuation premium. Hence, La Française, building on multiple years of real estate investment experience, has launched an actively managed sustainable listed real estate investment strategy, for both institutional and retail investors : La Française Lux-Sustainable Real Estate Securities.

Through a combination of ESG (Environmental, Social and Governance) and financial analyses, the target portfolio, comprised of forty to sixty lines, invests primarily in global real estate companies with solid ESG characteristics and that offer long-term capital growth perspectives.

Jana Sehnalova, Managing Director and Global Portfolio Manager at La Française Forum Securities (UK) Limited-London, summarizes the investment philosophy well, “The global sustainable real estate investment strategy seeks to exploit promising ESG analysis and financial mispricing opportunities ,which are indicative of medium to long-term superior financial performance. Given the growth in tenant demand for green real estate and tightening government regulations, real estate securities with underlying holdings that have superior environmental characteristics and strong focus on social and governance factors should outperform financially. We meet with up to one thousand real estate companies per year and it is during those face to face encounters that we are truly able to appraise the qualitative characteristics of the company and determine the existence of a holistic and integrated ESG strategy. At La Française, we are providing investors the opportunity to diversify their asset allocation with sustainable real estate securities in liquid format, in addition to direct real estate exposures. We believe that this fund is a clear sign of innovation and industry leadership.”

The investment universe of La Française Lux-Sustainable Real Estate Securities includes some 350 global real estate companies that undergo a rigorous ESG rating process, designed and applied by partner firm Inflection Point Capital Management UK Limited. Only the top ESG performers are retained for the “alpha pool” from which the investment manager (La Française Forum Securities UK Limited) picks stocks with above average risk adjusted return expectations. Matthew Kiernan, Founder and Chief Executive of Inflection Point Capital Management adds, “One of the unique features of the new strategy is the “relative climate benefit”, which it can create. By virtue of the generally superior energy efficiency of the properties owned and managed by our portfolio companies, the portfolio typically generates fewer greenhouse gases than a comparable investment in the benchmark index. While the size of that “ relative climate benefit “ varies with both market movements and portfolio changes, at launch, the portfolio would generate 67 tonnes of CO2 less than the benchmark per €100m invested. This type of benefit, in addition of course to the portfolio’s financial performance, could be attractive to the growing number of “climate-aware “investors.”

Philippe Lecomte, CEO of La Française AM International concludes, “Forty years of real estate investment experience are wrapped into a single investment strategy, which as far as I know, is quite unique on the market. Our investment strategy is based on an in-depth, firsthand appreciation of real estate companies and a proprietary ESG analysis. At present, information about companies’ performance on ESG issues is both incomplete and far from standardized. There are serious information inefficiencies in listed real estate markets. In-depth, proprietary research on this dimension of company performance and positioning could give investors a monetizeable advantage.”

 

Fund characteristics:

Fund name

La Française Lux-Sustainable Real Estate Securities

ISIN Code

LU1586242577 (Class I USD Hedged – Capitalisation)

Legal form

Luxembourg SICAV with multiple compartments

Performance objective

The management objective is to achieve income and long-term capital growth (total return) by investing in global real estate with high ESG (Environmental, Social & Governance) characteristics.

Risk Reward Profile

6 on a scale from 1 to 7 (7 representing higher risk, typically higher rewards)

Minimum subscription

$50.000

Inception date

July 2017

Subscription fees

NA

Management fees

Maximum 1.00% p.a.

Redemption fees

NA

Performance fees

NA

Recommended investment period

Over 5 years

Valuation

Daily

Custodian

BPSS Luxembourg

Associated risks

real estate related securities risk, concentration risk, emerging markets risk, derivatives risk, management risk, liquidity risk, currency risk, counterparty risk, operational risk.

 

Disclaimer
This press release is for Professional Clients in the UK and EC only and is not for consumer use. Past performances do not guarantee future performances. Investment products referenced in this presentation are not directed at and suitable for all types of investors. Potential subscribers are requested to carefully and independently assess the legal and commercial documentation provided and notably the risks entailed and the fees. Investors are to make their own risk analysis and not rely solely on the information that has been provided to them. The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.  Where La Française has expressed opinions, they are based on current market conditions and are subject to change without notice. These opinions may differ from those of other investment professionals. Issued by La Française AM Finance Services, home office 128, boulevard Raspail, 75006 Paris, France, regulated by the “Autorité de Contrôle Prudentiel” as investment services provider under the number 18673 X, affiliate of La Française. 

 

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About La Française Group

For forty years, La Française has been developing core competencies in third party asset management.

La Française has a multi-expertise business model organized around four core activities: securities, real estate, investment solutions and direct financing. The group caters to institutional and private clients throughout the world. 

With 639 professionals and offices in Paris, Frankfurt, Geneva, Hamburg, Stamford (CT, USA), Hong Kong, London, Luxembourg, Madrid, Milan, Seoul and Singapore, La Française manages €65.8bn in assets (as at 01/01/2019).

La Française is a forward-looking responsible investor and as such, incorporates tomorrow’s challenges into today’s investment strategy.

La Française is owned by Credit Mutuel Nord Europe (“CMNE”), a banking and insurance group present in Northern France and Belgium.