Consistent and stable returns

The ability to offer investors steady and stable income at times of volatility has seen the Trilogy Industrial Property Trust win this year’s Financial Newswire-SQM Research Fund Manager of the Year Direct Property Funds award.

Property Funds Manager, Ryan Mooney, said that one of the key components of the fund’s investment strategy was having a good understanding of the investors’ objectives.

“We are trying to understand what they are seeking, so we can then tailor investment product to suit. We speak to them as much as possible and what we’ve found within our investors base is that they are relatively income rather capital driven. What they are ultimately looking for is consistent stable income,” he said.

“They are not necessary looking for the quick wins or higher risk investment products that might double a unit price in a short amount of time.”

“So that is what we knew [our investors] were looking for and that has really formed our investment strategy, so what we have done is we have invested a lot in higher yielding assets.”

Mooney added that the fund focused on high yielding geographical locations that were well located and on the strengths of their tenants and stayed clear of the state capital markets.

“As an example, we have only one asset in Melbourne and we have no assets in Sydney, both of those are the markets where the assets are priced at very sharp yields, especially over the last two years, with a high level of competition,” the portfolio manager noted.

The Trilogy Industrial Property Trust has been designed to build a diverse portfolio of industrial properties, which include warehouses and manufacturing, logistics and distribution centres, with  the primary objective being to maximise potential investor returns diversified by both geographical location and the industries in which the tenants operate.

Mooney stressed that over the last financial year the fund outperformed the market in terms of comparison to other unlisted property trusts, and even within the industrial market.

“We have been able to maintain quite consistent returns on a total return basis by taking that conservative and stable approach,” he said.

“And [the award] is the really good recognition of the approach we have taken.”

He also said that taking a stable conservative and consistent approach meant there would be times where the fund’s peers would outperform.

“But it also means that in times of greater economic uncertainty that you will outperform your peers which is kind of the case for us [now],” Mooney noted.

“[The award] is also a good recognition of the benefits that the investors receive in the volatile market from the fund that is able to take a long term and stable and consistent approach towards an investment strategy.”