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Legal & General launches Hybrid Property Fund.

Legal & General Property (LGP) together with Legal & General Investment Management (LGIM) have launched the Hybrid Property Fund which they say offers Defined Contribution (DC) pension schemes "a new and innovative way to invest in property funds while managing volatility and liquidity."

Developed in conjunction with a major investment consultant, who requested an initial exclusivity period on the product until 30 April 2011, the fund invests in LGP's UK balanced fund (the Managed Property Fund) and LGIM's Global REITS Index Tracker Fund on a default position split of 70:30, respectively. LGP said the fund will be available to a number of other DC schemes and has already been selected by "a major Life platform" to provide its clients with global real estate exposure.

A press release from LGIM said, "Providing a property allocation that has been specifically designed in conjunction with investment consultants to meet the optimum criteria of UK DC pension schemes, the fund caters to the increasing long-term growth trend of DC. The combination of UK direct and global indirect funds provides greater diversification and liquidity, while reducing fund expenses and the entry and exit costs typically associated with direct property investment. Furthermore, in order to provide the ability to adapt to market movements, the manager has the flexibility to alter the 70:30 default position of the fund within pre-set benchmark ranges."

"The fund will be highly diversified from launch, providing incoming unit holders with access to pooled real estate investments with a combined value of [pounds sterling]1.5 billion ($2.4 billion). Established in 1971, the [pounds sterling]1.1 billion Managed Fund is LGP's longest operating property fund. An actively managed, daily-priced, UK property fund which invests directly in freehold and leasehold properties, it also has a provision for 15 per cent to be invested in indirect property vehicles and derivatives. The [pounds sterling]470 million ($760 million) Global REITS Index Tracker Fund was launched by LGIM in 2006 and aims to provide global, diversified exposure to listed real estate equity markets around the world by tracking the FTSE EPRA/NAREIT Global Real Estate Index.

2011 CPI Financial. All rights reserved.

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Publication:CPI Financial
Geographic Code:4EUUK
Date:May 16, 2011
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