Derivatives market surges ahead
The real estate derivatives market is beginning to take off in Europe, with a new £100m (e143m) issue in the UK and launch of trading in a European Exchange Traded Fund.
New real estate asset manager Protego arranged a £170m issue of real estate derivatives. In conjunction with Barclays Capital, the group offered £170m of property index certificates (PICs) after strong demand for the initial £100m offer. The derivatives track the performance of the UK IPD Annual Index.
Iain Reid, chief executive of Protego said: “This is an important step in the development of a derivatives market in real estate. This offering will, I hope, be the catalyst from which the market will grow.”
Meanwhile, the first European ETF based on property shares, has begun trading in Paris. The EasyETF EPRA Euro-zone has attracted e75.5m since its creation in July, said AXA Investment Managers, which launched the vehicle.
The listed fund tracks the performance of the EPRA Euro-zone index of real estate equities. The official market makers in EasyETF EPRA Euro-zone are Goldman Sachs and Morgan Stanley, with Merrill Lynch and Dutch bank Kempen & Co also participating in the fund.
l Protego has also made its first property acquisitions. with a £26m portfolio of UK high street, retail warehouse and leisure investments which will be used as the base for a UK fund set to launch early next year.
The asset manager has also recruited four new executives. Arlington Property’s former director of retail, James Salmon, will join as a principal and head of asset management. Peter Grancaric, founder of Drivers Jonas’s corporate real estate department, joins Protego’s new business team as an associate.
Edward Fenn-Smith joins as an associate in funds investment from CB Richard Ellis, where he was a senior surveyor. The firm has also recruited Professor Tony Key, formerly head of research at Investment Property Databank. Key, who is professor of real estate economics at Cass Business School, will act as a consultant to Protego, with the title head of investment strategy.