APPROACH

registered offices

Thursday, 22 Octomber, 2020

APPROACH

Approach

Our active investment approach works within a strong research and strategy framework and utilises our stock-picking and asset management skills to find and extract value from investment.

Our investment activities are conducted in accordance with our investment process with governance and oversight provided by our Portfolio Management and Transaction Advisory Committees. The role of these committees is to ensure that all advice and decisions are subject to a substantive and meaningful review.

Philosophy and process

Over the long term, income consistently provides the largest proportion of total return and thus our focus for core portfolios is heavily weighted towards securing and increasing income, to generate higher risk-adjusted returns.

Protecting and enhancing income can be achieved by rental value growth (open market and fixed increase reviews), improving running costs, replacing weak tenants with strong tenants, extending leases, improving the lease expiry profile, and increasing and improving net lettable areas where possible.

For portfolios that require an added value element, an allocation can be made to such opportunities where higher levels of risk may be accepted in the short term in exchange for higher returns over the long term, often through some element of major refurbishment or development activity. Even in this part of the portfolio, however, improving the income potential of the property is fundamental to achieving high returns.

Investment process

We seek to identify the risks and opportunities at each stage of our investment process: from devising a strategy through to stock selection, asset management and hold/sell analysis, and deal with them in a manner appropriate to each fund or client’s risk and return profile as well as their sustainability requirements.

Parker Lewis Investments

The board of Parker Lewis Investments is the “guardian” of the investment process and a key part of the risk management framework at Parker Lewis Investment. It is chaired by the CEO and its membership consists of the senior management team.

As well as establishing and enhancing investment policies, processes and procedures, it monitors all stages of the investment process from the production of our house view of countries and markets to reviewing investment opportunities and ensuring that client and fund guidelines are respected at both an asset and portfolio level.

Research and strategy

We believe that research adds significant value at both the macro and micro level within the property sector. As an example we use leading indicators to identify drivers of performance and pricing models to compare relative risk at both a market and individual property level. It plays an important part in every stage of our investment process.

Setting an appropriate strategy

We use research to both identify opportunities and risks across and within property markets, in terms of sectors, property types and tenants. Research also highlights key influences of the capital markets on property markets, which often predict turning points or changes in investor preferences for different types of real estate. Strategies and tactics specific to particular markets are formulated based on this research as well as on the experience and expertise of the fund team.

In developing strategies for our clients’ portfolios we bring together the skills of our research team in analysing data, researching markets and producing forecasts with our investment managers to provide on-the-ground input into trends and pressures in the market place to produce our house view of the property market. This then forms the basis from which individual strategies are developed taking into account our clients’ objectives.