Single Asset vs Multi-Asset Funds

We continue to receive a range of queries from investors regarding their preferences to invest in either a single-asset fund or a multi-asset fund. In short, it is down to investor preference; every investor typically will have their own reasons why they prefer one fund type over another or in some cases, they are happy to invest in both.

For the last few decades, single-asset funds have typically been the investment of choice; however, over the last five years, we have seen a shift by property fund managers towards multi-asset funds.

In Oyster’s view, there is a place in the market for both and the fundamental difference between the fund types is largely the spread of risk through diversified investment.

Investors who prefer single-asset funds typically require a higher minimum investment of $50,000 or more. Generally, they have a stronger preference to make their own investment decisions concerning the property’s location, asset class, construction type and age, tenant mix and weighted average lease term. Often these investors have funds readily available throughout the year and are comfortable making a prompt decision to invest in a single-asset fund when an opportunity arises.

Multi-asset funds can offer different entry points with some funds starting with a minimum investment of just $10,000 through to approximately $50,000. These funds can target a specific asset class or a spread of assets classes and are structured to invest in further property over time; this provides investors with the ability to diversify their exposure. Through this type of investment, single property and tenant risk, vacancy risk or unforeseen capital expenditure can be spread across a portfolio of property investments and provide investors with comfort around their investment; this usually eases any concerns regarding the performance of a specific property or tenant under a single-asset fund. Further acquisitions and divestment of properties within a multi-asset fund is the responsibility of the manager. Investors should always ensure they invest with a manager who has a strong track record and a well-defined investment strategy for the fund.

Oyster continues to focus on offering a range of property investment funds, both single-asset and multi-asset funds, to our investors whilst adhering to our investment philosophy of targeting well-located quality properties with strong tenant covenants and long lease terms.