Australian Unity Investments (AUI) has prioritised boosting the Investa Diversified Office Fund's liquidity, following the financial services group's agreement to purchase Investa's retail property funds business for an undisclosed amount.
The open-ended Investa Diversified Office Fund has more than $290 million in funds under management (FUM) and is the biggest within Investa's retail business, which AUI agreed to purchase yesterday.
The product has suspended withdrawals since April 2008.
"Our intention is to open the fund for applications and to develop liquidity options for investors over the coming months after we become the responsible entity," AUI general manager of property, mortgages and capital markets Mark Pratt said.
"The fund at the moment is well positioned from an overall perspective.
"The gearing is at 45 per cent and the fund is distributing to investors and has done so through the last three quarters.
He said AUI had a strong track record of implementing structured liquidity into its products, including its Healthcare Property Trust and Retail Property Fund.
"Those funds have been open for quarterly redemptions all through the GFC (global financial crisis)," he said.
Investa's retail business also comprises two closed-end funds - the Investa Fifth Commercial Trust with $97 million in FUM and the Investa Second Industrial Trust with almost $50 million under management.
The decision to sell its retail funds business was the result of a strategic decision to focus on business activities in the listed and wholesale capital environment, Investa said.
The acquisition, when finalised, would mean AUI's property funds business would have almost $2 billion in FUM and followed AUI's successful acquisition of the Diversified Property Fund from Westpac last year, Pratt said.
"The acquisition is the latest step in our long-term strategy to grow our property funds business," he said.
"The Investa funds add a substantial office portfolio to our sizeable retail, commercial and healthcare property funds, as well as augmenting our existing industrial property funds."
