Sustainable Global Property
The Trust provides an actively managed exposure to a portfolio of international listed property securities which are responsible for some socially responsive benefits.
Trust Objective
To grow the value of your investment over the long-term through a combination of capital growth and income by investing in a broad selection of global property securities that may offer positive environmental, social and governance (ESG) characteristics within their corporate culture, and to provide a total return (after fees) that exceeds the FTSE EPRA/NAREIT Global Real Estate Index (hedged) measured over a rolling three-year period.
Suitable Investor Profile
The Trust may be suitable for investors with an investment horizon of five or more years, who want a portfolio of global listed property securities that offer environmental and sustainability benefits for investors.
Fund Facts
Investment Approach
Perennial Real Estate seeks to buy listed, or soon to be listed, global property securities that offer good cashflow growth, consistent income characteristics and who are leaders in sustainable property management. Perennial Real Estate has the underlying belief that these securities will offer investors the best long-term investment outcomes coupled with socially and environmentally aware characteristics.
Investment Strategy
The Trust will invest in listed, or soon to be listed, property securities from international property markets, which Perennial Real Estate believes can offer superior capital growth and income characteristics.
Perennial Real Estate places great emphasis on bottom-up property securities research.
To meet the investment objective of the Trust, investments are selected using a two tiered approach:
1. Firstly, by determining the investment quality of the listed property security. Each security in the investment universe is ranked by Perennial Real Estate to identify potential investment opportunities. This ranking system aims to uncover undervalued listed property securities that offer good cashflow and income characteristics. This is implemented via a combination of qualitative and quantitative techniques, based on internally generated bottom-up property securities research. From this group of companies, a smaller number are identified by Perennial Real Estate for potential investment opportunities.
2. Secondly, applying the ESG ratings of the listed property securities and incorporating them into the investment decision making process to favour those property securities that demonstrate positive environmental and social initiatives in their core business activities and operations.
Perennial Real Estate has engaged the services of Innovest, a specialist research group, dedicated to the analysis and assessment of a company's ability to handle political, environmental, labour and human rights risks.
Innovest's research enables screening and rating of companies based on social and environmental parameters, which have been constructed to meet the sustainable aspects of the Trust's investment objectives. The specifically designed Innovest data is provided to Perennial Real Estate on an ongoing basis.
Innovest uses it's global listed property securities sector-wide research as the basis to assess the ESG risk profile and performance of individual companies, Innovest undertakes detailed research in a number of factors grouped in the four main sustainability parameters below:
1. Sustainable governance - Each company is assessed on the company's overall capacity and adaptability to address sustainability risks including identifying any new sustainability derived products and services.
2. Human Capital - Human capital issues assessed include recruitment/retention, training and development programs, employee motivation initiatives, and health and safety performance.
3. Stakeholder Capital - Each company is assessed on its ability to build value through strategic relationships/partnerships with key stakeholder groups (such as customers, regulators, local communities etc). This attribute assesses the company's exposure to emerging market economies and how well company management has responded to address these risks.
4. Environment - Each company's performance is assessed in relation to environmental risk assessment; governance, strategy and management capacity and systems; environment-based business opportunities and improvement in environmental performance. In the global property securities sector there is specific focus on energy and other natural resource (water, air and waste) related risks, opportunities and management as well as efforts to address and reduce greenhouse gas emissions that are the cause of climate change.
Once the sustainability attributes of each security is assessed and modelled by Innovest analysts, each global property security is given a score from AAA (best) to CCC (worst). This rating is then used by Perennial Real Estate to tilt holdings in each security in the portfolio construction stage of the investment process. See the below table for positive and negative skews:
| Innovest Rating | Innovest's Perceived Sustainability Quality | Perennial Real Estate's Sustainable Global Property Securities portfolio constriction tilt |
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| AAA | High | Positive |
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| AA | Positive | |
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| A | Positive | |
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| BBB | Average | None |
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| BB | Negative | |
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| B | Negative | |
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| CCC | Low | Zero Weight |
The Innovest rating may contribute to Perennial Real Estate's decision on whether or not a security is held and its weight in the portfolio.
Perennial Real Estate realises a portfolio holding where a company:
Fails to meet Perennial Real Estate's specific investment criteria; or
Has their independent Innovest rating downgraded to a CCC.
Perennial Real Estate will use its discretion on the timing of sales in securities should the above triggers be met.
As the Trust grows, the portfolio will typically be expected to hold between 40 and 50 securities, with a minimum of 25 and a maximum of 75.
The Trust is authorised to utilise derivative instruments for risk management purposes, subject to the specific restriction that they cannot be used to gear portfolio exposure.
Currency exposure is generally hedged. From time to time, the Trust may accept unhedged or overhedged exposures.
The Trust will attempt to be fully invested at all times, with a cash exposure not exceeding 10% for any length of time.
Investment Summary
| Minimum Investment | $25,000 |
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| Minimum Added Investment | $5,000 |
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| Risk/Return Profile | High |
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| Returns achieved mainly through | Growth & Income |
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| Income Distribution | Half Yearly |
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| Minimum Recommended Investment Period | 5 Years |
Unit Prices
Distribution
| Distribution data not available. |
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* A fund payment is a payment made by a Managed Investment Trust that represents a distribution of its Australian sourced income (other than dividends, interest and royalties).
Publications
