KEY POINTS:
New Zealand's newest boutique fund management firm is to launch its second investment fund just one year after opening for business.
Mint Asset Management, set up by former ING fund managers Rebecca Thomas and Mark Ford, went live with its Mint Australia New Zealand Real Estate Investment Trust
at the weekend and hopes to find favour with Kiwis' love of property investment.
The property fund follows the launch of its Australia New Zealand Active Equity Trust in March and probably comes as no surprise, after property specialist Shane Solly joined.
"We have been looking at this asset class for a while," Thomas said. "But it was the PIE changes that encouraged us to go ahead with this second offering."
The new portfolio investment entity regime was introduced on October 1 and allows investors in PIE compliant funds to be taxed at their individual rate rather than the company tax rate of 33 per cent. Capital gains on New Zealand listed companies and some Australian listed companies are also tax free.
Mint's new property fund is PIE compliant and will invest in between 15 to 25 securities made up of a mixture of New Zealand and Australian listed property trusts and property-related investments.
Unlike the group's first fund, which can be fully invested in Australian shares, the property fund will have a 60 per cent limit on Australian listed property trusts and related companies.
However, it can be fully invested in New Zealand listed property trusts and property-related companies such as ports, airports and infrastructure companies where a major part of the income is derived from property.
While most of the Australian listed property funds won't come under the capital gains exemption, Thomas said there were still advantages to investing in property under the fair dividend rate rules, which also came in this year.
"What you really want under the FDR rules is something that pays a very high yield - property fits that bill because you get access to rent on the properties as well as the capital gain."
Thomas said exposure to property also protected against inflation because rents were regularly reviewed and revised upwards depending on the consumer price index.
Alongside the retail property fund the group also has a wholesale fund, which is open only to institutional investors. This has already attracted an $11 million investment in seed money from one superannuationfund.
Thomas said many super funds were looking to move from bond investments into property to take advantage of the new PIE rules.
The property fund has a minium investment of $5000 and an annual management fee of 1.25 per cent plus a performance fee of 10 per cent of outperformance of its target return.
It will aim to produce a gross return of the 90-day bank bill rate plus 3 per cent.
