Fund to lure high-net-worth investors

PUBLISHED : Tuesday, 31 August, 2010, 12:00am
UPDATED : Tuesday, 31 August, 2010, 12:00am

A New Zealand-based fund manager has launched a mid-market fund to entice high-net-worth investors in Hong Kong, the mainland and Singapore. The Auckland-based Du Val Group has launched the fund in New Zealand, which will capitalise on historically low real estate prices in the region.

According to William Nobrega (pictured), managing partner of The Conrad Group, which is an adviser to Du Val, the fund will purchase assets totalling hundreds of millions of dollars, and hold the assets until the market turns and then sell the properties, providing investors dividends.

The fund's size is US$180 million, but the promoters can increase to as much as US$350 million depending on the demand from Asia, especially the mainland and Hong Kong.

Jason Smith, managing director of Du Val, says that the fund was looking to buy commercial properties, but listed in Auckland, Christchurch and Wellington, three of the biggest cities in New Zealand. Smith says that a number of properties in New Zealand are trading below their net asset value and now is the right time to buy them.

'We will be looking at those properties which are listed on the stock exchange and have [a] good chance of their values appreciating in the future,' Smith says.

New Zealand's property prices did not fall as severely as those in the United States and Western European economies.

According to the latest update from the New Zealand Institute of Economic Research, New Zealand's economy is expected to grow marginally this year.

'The next few quarters will be bumpy, as the economy slowly converts the rebound into recovery,' Shamubeel Eaqub, the institute's principal economist, was quoted as saying in the report.

'The New Zealand economy is out of recession. We expect continued improvement.'

The institute says the economy emerged from its worst recession in three decades in the second quarter of New Zealand financial year, which is the three months to September, when gross domestic product increased 0.1 per cent.

Nobrega says factors that make New Zealand appealing to investors are sustainable development, green construction, alternative energy and growth in the IT industry.

He says that in future, the fund will look at listing in either Hong Kong or Singapore.