Student Accomodation as an asset class

Thursday, May 19, 2011

Given that stock markets have been an incredibly volatile and relative to return, high risk investment over the past 5 years, and bond yeilds have been the lowest anyof us have seen in our working lives, investors who are looking for stability and better than inflation returns have looked to alternative asset classes.

Boutique fund managers have emerged offering alternative investment strategies which provide low volatility returns with higher than average performance figures.

One such class of assets is that of student accomodation. These funds, based out of the UK, purchase, or invest in, student accomodation. That could be halls of residence, or houses and apartment blocks which can be let to scholars. These funds base their returns in the main on rental income yields, although some do pass on the capital gains and values of the properties they have purchased. Performance figures are in the range of 6 to 9% in GBP terms, but they often have hedged versions available in USD and Euro.

So what's the downside? The main risk factor with these funds is their ability to become liquid, this entails the sale of properties which as we all know is a slow labourious process, and an emergency sale will always yield a lower price than is usually desired. These situations could arise when there is a run on capital, such as during the credit crisis. In these situations it is not uncommon for these funds to suspend redemptions. This is to protect the other shareholders from a fire sale.

On balance these alternative funds can offer diversity and returns in a portfolio. Because of their boutique nature it is not advisable to invest more than around 10 to 15% into any one fund.

In summary for investors looking for income or stable returns these funds offer a great opportunity, but as always make sure you take advice before jumping in.

Inflation

Monday, May 16, 2011

Posted by Mark Paine, Managing Director of Meyado Singapore

''This was a fun way to spend time on my way home last night.

In 1978 I used to get 10p per day to spend on my holiday - I would spend this money on a Commando comic which I would buy as soon as the corner shop opened and would have read by about 10am. My brother would also get 10p but wouldn't spend it and then read my comic for free once I'd finished with it. He'd save his 10p's and deposit the pound or so he'd accumulate in the Anglia building society when we got back home. I still have my Commando comics.

Who was better off and by how much?

10p in 1978 equates to 46p in today's terms.
Had 10p been invested in a deposit account in 1978 it would be worth about 117p
Commando comics are selling on Ebay now for between 65p and 300p

I'd say it's a close run thing.

These are fun sites http://www.hbosplc.com/economy/economicfactbook.asp for deposit rates http://www.thisismoney.co.uk/historic-inflation-calculator for inflation.''

Ongoing Reviews

Wednesday, May 11, 2011

The past month has seen continued shock events, both positive and negative. Without regurgitating Global events, it is clear to see that there is still an awful lot of instability in both the political, and economic underpinnings of the developed market places and huge impacts in the Middle East, with and without UN / US intervention.

The upshot of all of this has been sideways movements in major equity markets, massive swings in commodities, notably precious metals and currencies such as SGD and AUD have continued to strengthen.

For clients now it is more important than ever to get asset allocations right - our strategy over the past 18 months is paying off well and we are not changing our overall view at this stage. We are happy to discuss this, simply contact us at singapore@meyado.com or visit our website http://www.meyado.com.sg/

Discounts for Meyado Straits Members

Join our friends at The Comedy Club next week for 3 days of belly-aching laughter with guests Craig Hill (SCO), Francesca Martinez (UK) and Daniel Sloss (SCO).

Meyado Straits Members are entitled to 1-for-1 tickets ($50 per ticket)
Show Information:
12 May (Thursday), 8.30pm / Venue: THE BRITISH CLUB
13 May (Friday), 8.30pm / Venue: TAB
14 May (Saturday – Early Show), 7.30pm / Venue: HOLLANDSE CLUB
14 May (Saturday – Late Show), 8.30pm / Venue: HOLLANDSE CLUB

Members, kindly RSVP to rsvp@creamcounsel.com to enjoy your 1-for-1 privilege. Please RSVP at least 1 day before the event.

For our Meyado Straits Members

One of the forefathers of dance music, Bert Bevans has played an integral role in the disco dance scene of New York and Europe. Come to Ku De Ta Club in your retro threads and the best dressed wins a bottle of Louis Roederer Champagne!

Where: Ku De Ta Club
Time: 9pm till late
Cover Charge: $50 (includes 1 drink)

A limited number of complimentary passes are available for Meyado Straits Members on a first-come-first-served basis. Kindly write into rsvp@creamcounsel.com by 12th May for a place on the guest list.