Catella APAM has raised £102.2m for its new equities fund focusing on the UK listed real estate sector.
Catella APAM Strategic Equities I will focus on identifying mispricing within the UK listed real estate sector and will be led by Simon Cooke, founding shareholder of Catella APAM, and Ben Kennedy, head of investment and research. It is Catella’s first fundamentals-focused product investing in the listed markets.
Cooke and Kennedy said they had designed the fund’s strategy to target undervalued UK-listed real estate companies, whose underlying asset values have been impacted by recent macroeconomic challenges and shifting demand patterns.
Kennedy said: “The real estate sector has become more operationally intensive and complex, as asset owners begin to acknowledge their role in providing a service to customers rather than just passively holding assets. This is likely to create a more disparate distribution of returns as the gap between winners and losers widens.
“Our access to actionable, real-time asset data and hands-on expertise gives the fund a predictive edge in assessing companies’ current and future value trajectory. Adopting a value investment approach in UK-listed equities after a period of repricing should offer strong risk-adjusted returns to our investors.”
Cooke added: “I believe the listed sector is often undervalued compared with the wider market, as are the strategy, assets and management teams, particularly following economic downturns. The sector currently trades at a significant discount to NAV, dragged down by recency bias and consolidated by the backward-looking valuation process.”
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