The Charities Property Fund passed a significant milestone at the end of the second quarter of 2003 and now stands at more than £100m.
This demonstrates the increasing popularity of indirect property investment among charities.
"The increasing success of The Charities Property Fund shows that charities are looking at property as a mainstream investment vehicle rather than an ‘alternative' asset class," says Charles Mesquita, charities specialist at Carr Sheppards Crosthwaite. "At a time when worldwide interest rates have been falling, commercial property generally offers a predictable source of income, currently around 6% to 7%, given its long-term leasing structure."
One of the new investors this quarter is the King's Fund, the charitable foundation that focuses on health. Like many charities, the King's Fund has seen its assets decline over the past three years. This prompted the trustees to review the foundation's investments with the aim of achieving greater returns for less risk.
Following the investment review, the King's Fund for the first time decided to place 5 per cent of its £120m investment portfolio into indirect property funds. £3m is invested in The Charities Property Fund and £3m is invested in the Triton Property Fund.
Frank Jackson, the King's Fund's director of resources, says: "We are hoping for better returns at lower risk and lower volatility. The new property fund element of our portfolio is helping to achieve a good balance in the King's Fund's portfolio."