Perennial Global Property

Perennial Real Estate 

Investment Style: Core (Global)

Perennial Real Estate Investments Pty Ltd (PRE) is a Sydney-based firm formed in January 2006 and led by Stephen Hayes (Managing Director). PRE is jointly-owned by Perennial Investment Partners (PIP), the investment management subsidiary of the listed IOOF Group, and members of PRE's investment team.

PRE believes that investment markets are not fully-efficient as asset prices are sometimes driven by irrational influences. These influences often create market ‘overshoots', where the market value of a company differs significantly from its true worth. This is particularly evident on a global basis. Through the use of a detailed proprietary investment process, PRE believes it can identify and exploit these opportunities to produce superior performance. Portfolios are created on a bottom-up basis and are not expected to have any strategic market-cap bias.

PRE's investible universe comprises several hundred stocks, consistent with the FTSE EPRA/NAREIT Index which is PRE's preferred benchmark. The manager then applies several screens based predominantly on recurring cashflows as well as risk and quality, to reduce the universe to around 100 stocks. These stocks are included in PRE's relative valuation table (RVT), the key driver of portfolio construction decisions, although a subjective overlay is also applied.

Analysis is predominantly internally-driven, including a substantial company visit program, although the firm also uses external data (for instance, sourcing private property feeds from DTZ, a global real estate adviser). Global portfolios are expected to hold between 25-75 stocks and are typically fully-hedged.

Stephen Hayes (Managing Director) is the portfolio manager and heads a team of investment managers and analysts structured along regional lines. The investment team is split between Sydney, New York, London, and Hong Kong.