UK - Property investment is set to undergo the same level of transparency as other asset classes, following the launch of a new code of best practice by the the National Association of Pension Funds (NAPF) and the Association of Property Unit Trusts (APUT).
The new code is a revised version of existing guidelines set out by APUT in 1997 to aid greater transparency around a trust’s activities, and to standardise reporting to investors. This already includes information on subscription/redemption procedures, pricing, investment in close-end structures, distribution arrangements, standardisation of performance records, statements on gearing, and management fees.
The new code adds another section dealing with management structures and accountability.
The code - a voluntary procedure - does not seek to prescribe one particular structure over another, but acknowledges that trustees, managers and advisory committees/boards all have roles to play, and helps investors to make clear comparisons between different funds, said APUT.
John Wigley, chairman of the NAPF property sub-committee, said: “Our support for the APUT Code recognises the increasing importance of indirect property funds, like PUTs, in investment portfolios and the fact that investors have the right to expect the same level of transparency and accountability which are routinely prescribed for other asset classes.”
For APUT, the endorsement by the NAPF is a significant acknowledgement of their efforts to bring credibility to a much maligned part of the property investment market.
Ian Mason, chairman of APUT said: “The good managers have learnt from the mistakes of the past. This Code has been put in place to protect investors who have the right to know how a fund is being managed.”
He warned that the new joint code comes at an important time with investors being offered an increasing array of property vehicles and partnerships.
“You don’t have to be a PUT to comply with the spirit of the code and investors should be wary of any fund where the standards set by the NAPF and APUT are not being followed,” he added.
By Madhu Kalia
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