Lonsec has awarded a ‘Recommended’ rating to the Quay Global Real Estate Fund.
The fund is an unhedged global property securities strategy managed by Quay Global Investors which aims to deliver a return of CPI plus 5 per cent a year over five plus years. Since inception[if !supportFootnotes] the Fund has delivered a total annualised return of 16.7% to May 31 2017.
The ‘Recommended’ rating indicates that Lonsec has strong conviction the financial product can generate risk adjusted returns in line with relevant objectives.
In its report, Lonsec said it considers the experience and track record of the portfolio management team to be highly impressive.
“The rating upgrade reflects increased conviction in the capabilities of the impressive, albeit small, investment team and the merits of the Fund’s highly focused research and portfolio construction approach.
“The Fund is managed by a pair of experienced and high quality real estate professionals in Justin Blaess and Chris Bedingfield.
“The two portfolio managers are highly motivated and their interests are strongly aligned with end investors via a majority stake in the Quay funds management business and significant personal investments in the Fund.
“Alignment of interests between portfolio managers and investors is considered strong in a peer group where some funds could be accused of being too index-aware to warrant their active management fees. Accordingly, the high Tracking Error and Active Share of this product is appealing.”
Lonsec also said: “The investment process is highly differentiated from peers in several ways, with Quay seeking to identify companies with strong management and growth potential. There is also a thematic element, which again tends to be mostly based on sectoral growth. As such, Lonsec considers the process to be less sensitive to valuation than peers.
“Lonsec believes the Fund offers investors a good opportunity to achieve returns consistent with the Fund’s objective and to outperform peers and G-REIT benchmarks.”
Chris Bedingfield from Quay said, “the ratings upgrade is a testament to the fund’s investment process, which is not benchmark driven but rather is based on identifying the best rent-based investment opportunities backed by long term secular themes and trends.
“The fund offers access to a wide variety of attractive real estate opportunities across multiple geographies, many of which are not available in Australian real estate.”
Quay was launched in May 2015 as a partnership with principals Justin Blaess and Chris Bedingfield and Bennelong Funds Management. Prior to this, the business operated as Quay Real Estate Advisors, which was founded by Justin and Chris in 2013.
The Lonsec rating upgrade follows the “Superior’ rating awarded by SQM in January 2017.
The Lonsec Rating June 2017 presented in this document is published by Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL 421 445. The Rating is limited to “General Advice” (as defined in the Corporations Act 2001 (Cth)) and based solely on consideration of the investment merits of the financial product(s). Past performance information is for illustrative purposes only and is not indicative of future performance. It is not a recommendation to purchase, sell or hold Quay product(s), and you should seek independent financial advice before investing in this product(s). The Rating is subject to change without notice and Lonsec assumes no obligation to update the relevant document(s) following publication. Lonsec receives a fee from the Fund Manager for researching the product(s) using comprehensive and objective criteria. For further information regarding Lonsec’s Ratings methodology, please refer to Lonsec’s website at: http://www.lonsecresearch.com.au/research-solutions/our-ratings
The rating contained in this document (January 2017) is issued by SQM Research Pty Ltd ABN 93 122 592 036. SQM Research is an investment research firm that undertakes research on investment products exclusively for its wholesale clients, utilising a proprietary review and star rating system. The SQM Research star rating system is of a general nature and does not take into account the particular circumstances or needs of any specific person. The rating may be subject to change at any time. Only licensed financial advisers may use the SQM Research star rating system in determining whether an investment is appropriate to a person’s particular circumstances or needs. You should read the product disclosure statement and consult a licensed financial adviser before making an investment decision in relation to this investment product. SQM Research receives a fee from the Fund Manager for the research and rating of the managed investment scheme.