F&C's Philbin allows property weighting to fall

F&C multi-manager Richard Philbin has started to temper his considerable exposure to commercial property with measures that including selling the property funds run by his own employer.

Philbin remains a fan of the asset class and retains 20% of his Distribution fund in a range of closed end property trusts, including the Isis Property Trust 2 , which is offered by F&C, the Insight Property Trust and the UK Balanced Property Trust (UBRA) managed by Scottish Widows Investment Partnership's Michael Cunningham. However, he has temporarily suspended his property purchases.

Philbin said: 'We've not sold or reduced any of our property holdings, but rather have let strong cash inflows naturally work the property weighting lower. Strong demand for property assets has seen premiums blow out recently and while we continue to like the asset class very much - in particular the very diversified, stable income stream it offers - we are happy to wait for market weakness before adding to our weighting once more.'

Philbin's comments come two days after the three closed-ended property funds run by F&C predicted more challenging market conditions for the year ahead.

Reporting full-year results for Isis Property Trust 2 chairman Quentin Spicer said: 'At current valuation levels the scope for further increases in commercial property values is limited and rental growth could come under pressure if there is a prolonged slowdown in economic growth or consumer expenditure.'

Under Phibin's management the £87 million Distribution fund (F&C Multi Manager Distribution 1 Acc) , which was launched in February of last year, has returned 20.24%. This figure compares favourably with the average Cautious Managed sector fund over the same period, which delivered 15.01%.