The fund provides a unique opportunity to connect investors with quality property investments.
“We know that New Zealanders love property. People can see the investment and identify with it,” said Paul Foley, Chairman of Booster Financial Services.
“Wealthier people like investing in land and farms for good reason. Most people don’t have the wherewithal to invest in a whole farm or orchard. For Mum and Dad investors this will be a tangible investment. When they go to Nelson they can go past the Waimea Estate or Awatere Valley in Marlborough, and know they own part of it,” said Foley.
“We strongly believe that the fund is a very necessary investment option particularly in the current low interest climate. Reserve Bank Governor Adrian Orr has talked about this very issue, asking savers to look at alternatives to long-term deposits.”
The fund is two years old, but this NZX listing enables units in the fund to be bought and sold more easily by investors and financial advisors.
The listed fund is a property investment with good liquidity. Listing the Fund provides the daily liquidity of the open market, allowing investors to cash up when they want to.
“Listing the Private Land and Property Fund will provide greater visibility to the general public,” said Foley.
Booster believes investors will choose to divert some of the $300 billion currently sitting in term deposits to the fund. The Private Land and Property Fund, a Portfolio Investment Entity (PIE) aims to generate annual long-term returns of about 8% before tax after all fees and on a seven-year investment timeframe.
The fund invests currently in agricultural land. The properties are in the North and South Islands and are vineyard properties, with further horticulture properties in the pipeline. Investments are likely to broaden over time, and may be supplemented with industrial, commercial and retail properties.
The compliance listing allows investors flexible access to the fund. They can buy and sell on the open market whenever they want to. They also have the option to invest directly through Booster Financial Services, as has been the case since its inception.
“It’s another way for retail investors to have freedom and control of how they want to grow their portfolios,” said Foley.
Booster’s Private Land & Property Fund was originally conceived to provide property investment opportunities for Booster’s KiwiSaver funds.
“We have seen the challenges low interest rates create for savers,” said Foley. “The Private Land and Property Fund was the company’s response. It connects savers with income-generating land investments and the lower volatility of unlisted property.
“We do not believe New Zealanders should put all their eggs in one basket,” he said. “High returns often come with higher risks, so it is a good idea for investors to diversify their own portfolios. The Private Land & Property Fund is a particularly attractive environment for investors who can’t weather short-term fluctuations or are vulnerable to life events. We have had good support and this listing will enable more investors to participate.”
The fund is supervised by Public Trust. It is Booster’s first public listing. Booster has two other specialist investment funds. Booster Tahi LP owns New Zealand businesses, predominantly operating on land owned by the Private Land and Property Fund and the NZ Innovation Booster invests in university intellectual property in conjunction with Victoria University of Wellington. Booster manages $3b across its range of KiwiSaver and Investment funds, most of which have an exposure to its specialist funds.