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Mind your heads! It's a flock of property vulture funds!

By Richard Lander | 10:15:00 | 10 January 2008

The iron law of investment says that for every forced seller, a distressed buyer will emerge.

And lo and behold, we have the third commercial property "opportunity fund" (bless their little cotton euphemisms) to be launched in a week. Following launches by Threadneedle and Invista Real Estate Investment Management, we have a £1bn fund from Evans Randall according to Property Week:

'The fund is designed to take advantage of difficulties in the market, as property owners seek to liquidate assets in response to redemptions by their investors, or because of other liquidity issues.

'The UK investment bank’s first asset to go into the fund will be Condor House in the City of London, which it recently bought for £115m, reflecting a yield of 5.3%.'

The more of these funds we get while panicked investors are still running for the door, the greater the chance of an investment manager force-selling an office block from a pooled pension fund and seeing it snapped up by an in-house 'opportunity' fund. All legit, I guess, but how weird would that be?

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Comments (2)

Charles Winstanley - Charles Winstanley says

13:42 | 11 Jan 2008

Richard, nothing weird about that at all.  It's simply a case of the smart money capitalising on herd mentality!

Mike Gray - Mike Gray says

15:21 | 11 Jan 2008

The same old story. The brains stay calm, while the foolish panic. It still works to "buy when others are selling, and sell when others are buying."

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