Pinnacle boutique readies investment rejig, fee cut

A boutique partly owned by Pinnacle Investment Management is planning to rejig its investment strategy and cut fees by 12bps for one of its funds.

The Resolution Capital Core Plus Property Securities Fund - Series II currently invests predominately in ASX-listed real estate investment trusts (A-REITs) and real estate securities, with the ability to invest up to 20% globally in similar securities.

It now wants to expand its investment universe to include listed infrastructure securities trading on the ASX or overseas stock exchanges, as it sees A-REITs get concentrated.

Only 10 issuers control 86% of the S&P/ASX300 AREIT Accumulation Index's market cap and almost half of the A-REITs are concentrated in the retail real estate sector, which is experiencing change as consumer behaviour changes and e-commerce grows, Resolution and Pinnacle said in a letter to investors.

Expanding the investment universe to ASX and global listed securities will allow the fund to take positions in listed infrastructure such as airports and toll roads.

The changes will come into effect on October 1, subject to unitholder approval which is due on September 25.

If the changes are implemented, the fund will still hold at least 50% of its portfolio in ASX-listed real estate securities and will have the ability to go maximum 50% in ASX-listed infrastructure.

It also plans to change its name to the Resolution Capital Real Assets Fund - Series II, to reflect the changed investment strategy.

The management fee will drop from 0.92% p.a. to 0.80 p.a. with the changes.

The fund was previously managed by Perennial. Resolution Capital took over the investment management in 2014 when it took over the management of three Perennial real estate funds.

Resolution Capital was established in 2004 and managed $8.3 billion at June end.

Pinnacle Investment Management owns 43.5% of Resolution Capital.

Read more: Resolution CapitalPinnacle Investment ManagementA-REITsPerennial
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