Interesting Article re funding alternatives being toutedAMP...

Interesting Article re funding alternatives being touted

AMP holds LPT strategy, wins mandate

Tuesday, 3 March 2009 12:25pm

Global property securities fund manager, AMP Capital Redding Investors isn't changing its listed property strategies and continues to win mandates while the listed property sector continues to under-perform.

Kim Redding, AMP Capital Redding Investors executive director and global portfolio manager, said the firm isn't changing the structure or strategy of its funds.

He said the firm is focused on identifying properties that can service their debt and wade out the current crisis.

"The prospects are pretty bright right now, if [those properties] can service their debt, and provide strong dividend payments. If and when inflation becomes an issue again, what you want is an asset that has some inflation hedge like real estate securities," he said.

"There will be a time when listed property trusts (LPTs) perform very well and real estate investment trusts (REITs) perform very well, the key to getting there is the financial system and really the US housing market."

Sticking to its strategy may be paying off after the firm received a $50 million global REIT mandate from an undisclosed investor recently. In addition, several of the firm's clients allocated more money to the sector.

This may be only the beginning. Redding said the listed property and REIT investment mandate pipeline could be a large as $1 billion.

"It depends from institution to institution and what their allocation looks like but if they do have fresh money you would see a healthy appetite for real estate securities," he said.

In separate news, Redding said superannuation sector and insurance firm funding could buoy the local listed property sector. He said the Australian listed property sector relied on local banking credit that is typically on a three-year term.

"If you look at some of the rubbish heap and took the better [properties], if they're un-pledged, a superannuation fund could put a loan on it from for 10 years," he said.

"This could be used to extinguish the debt on the balance and clean up the overall structure."