First Property (FPO) has won a contract to manage a £125m property fund on behalf of the Shipbuilding Industries Pension Scheme (SIPS), an existing pooled fund client.
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The unleveraged fund will target annual returns of 7 per cent over 10 years, focusing on all sectors of the UK property market. The timing of the contract win is significant, ahead of the August closing of the group's largest fund.
Even without the SIPS mandate, First Property had already offset the loss in income with smart property investments in the UK and Poland using its own capital. For the new mandate, FPO expects fee income, which will be generated once the fund is fully invested, to contribute to at least 10 per cent of annual profits on current earnings.
