ING UK Real Estate Income Trust fund manager Michael Morris this week moved to set up the company’s internal investment management business.
The move comes after February’s announcement that CB Richard Ellis had bought the trust’s investment manager, ING Real Estate Investment Management, for $940m.
Morris will move from ING REIM to become chief executive of the company’s wholly-owned investment management subsidiary, called Picton Capital.
He is being joined by Andrew Dewhirst, who was head of real estate fund accounting at ING REIM, as finance director.
The £207m ING UK REIT will also change its name to Picton Property Income in May.
Morris will assemble a team of 10 to 12 people at Picton Capital in the coming nine months.
“This is very much about becoming an internally managed property company and having a team of 10 or 12 people who are 100% dedicated to managing the company’s assets, financing and everything that goes alongside that in a listed business,” he said.
“There are cost savings, but it is about creating a bespoke team that will run this real estate portfolio. And, as we’ve seen with other internalisations, that is what investors want. They want people that are dedicated to managing the things they are invested in.”
IRET said it expected the internalisation of its investment management would lead to annual savings of around £400,000. It also said it would attract a wider group of investors because many major institutions invest only in internally managed structures.
At ING REIM, Morris had a direct team of five on the real estate side, plus supporting functions from elsewhere in the business.
IRET this week reported a return to profit and a 14% increase in net asset values in its full-year results to 31 December.
The company posted a pretax profit of £31.9m, up from a loss of £19.3m the previous year. Net asset value rose from 55p a share to 60p.
Nathan.cross@estatesgazette.com
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