26 Jun 2024
At PMG, diversification is a cornerstone of our strategic approach, as a critical strategy for managing risk, fostering investor confidence and setting our funds up for long-term growth.
However, achieving effective diversification is more complex than simply acquiring different assets. At PMG Funds, diversification is executed through a deliberate strategy that includes different property sectors, locations, tenants, sub-sectors and property sizes.
The diversification differentiator
With over three decades in the commercial property industry, we have navigated through numerous economic cycles, including the Asian Financial Crisis, the Global Financial Crisis, and the COVID-19 pandemic. These experiences were pivotal in our strategic shift from standalone syndications to a diversified managed funds model.
“Our experience has solidified our belief that quality, well-managed commercial property remains a robust long-term investment,” says Scott McKenzie, CEO. “But we’ve learned that sector performances can fluctuate due to various trends and external pressures.”
Unlike syndicates that often concentrate on a single property type, managing a diversified fund allows for a dynamic investment approach. “In recent economic downturns, those invested in diversified funds faced less risk from any single sector or region failing,” says Scott. “The impact of a single tenant default is mitigated across a diverse portfolio, which can absorb such shocks more effectively.”
Strategic diversification by sector, location and tenant
A well-balanced portfolio, diversified across sectors, regions, and tenants, positions us to navigate market fluctuations and protect investor capital.
Our retail fund portfolio spans from Whangārei to Invercargill, including high-quality offices, warehouses, educational facilities and retail properties. This strategic geographic and sectoral spread enhances the portfolio’s resilience to market changes.
“We aim to acquire and enhance high-quality assets that attract tenants by offering added value, such as sustainability enhancements,” says Scott.
Our commitment to strategic diversification reflects our dedication not only to resilience but also to being a trusted fund manager of choice for our investors, ensuring that their investments remain secure and positioned for growth. By prioritising diversification, we are better equipped to meet future challenges and continue delivering long-term value to our investors.
Read more about our Fund Strategy here.
Disclaimer: The information in this blog is general and current as of June 2024. It is not intended as regulated financial advice under the Financial Markets Conduct Act 2013 and does not consider your specific circumstances. PMG does not provide financial advice. Please consult a licensed financial advisor before making investment decisions.
