Sarasin issuing the first sustainable real estate equities fund

Sarasin is issuing the world’s first fund to specialise in the shares of sustainable property companies, the Sarasin Sustainable Equity – Real Estate Global Fund. The companies included in the portfolio are pioneers in the sustainable construction and management of properties. This innovative product has been developed by an experienced team of real estate and sustainability specialists at the Sarasin Group.

The new sustainable real estate fund, Sarasin Sustainable Equity – Real Estate Global, is available from 10 July 2009. The fund is the consequence of the repositioning of the former Sarasin Real Estate Equity - IIID (EUR). Taking into consideration environmental and social criteria, the fund invests worldwide in a broad spread of listed companies active in real estate and in Real Estate Investment Trusts (REITS).

Sustainability aspects of real estate

The biggest challenges facing the real estate sector are soaring energy costs and greenhouse gas emissions. There is now growing political pressure for more emphasis to be placed on sustainability in construction projects and building design. In addition to energy consumption and the use of renewable energies, there are a number of other aspects that need to be taken into account when planning, building and maintaining properties. These include smooth integration into the city landscape, avoiding the use of hazardous building materials, good public transport connections, and compliance with applicable building regulations.

Benefits and risks of the new fund

The companies selected for the Sarasin Sustainable Equity – Real Estate Global Fund already face up to the future challenges of this sector and therefore play a pioneering role in combating climate change. The fund concept allows investors to participate in a forward-looking theme which has not yet been taken up by the wider investment community. The product gives investors convenient access to an investment segment that requires intensive research and specialist market knowledge.

Sustainability makes a positive contribution to the fund's performance. In this way tenants recognise the advantages of sustainable building methods, as reflected in fewer unoccupied buildings and wider acceptance of higher rents in return for lower running costs. On the property market, sustainable buildings fetch higher prices.

The risks associated with the fund involve price fluctuations mainly in response to company-specific developments as well as changes in the economic and interest rate environment. There is also an exchange-rate risk if the investor’s subscription currency is not the same as the fund's investment currency (or currencies).

Innovative combination based on a 20-year track record in sustainability and in-house real estate experts

Sarasin recognised the importance of sustainable investments as long as 20 years ago. What started off with the inclusion of environmental criteria in certain asset management mandates back in 1989 has now developed into one of the bank’s most important pillars of business. Over the past ten years the volume of assets that Sarasin manages according to sustainable principles has soared from CHF 626 million to CHF 6.5 billion by the end of 2008. This makes Sarasin once again clear market leader among Switzerland’s sustainable asset managers, with a market share of 21%.

Sarasin Sustainable Equity – Real Estate Global Fund is an innovative product that combines the skills of the Sustainable Research team at Sarasin Sustainable Investment in Basel with the know-how of property experts at Sarasin & Partners in London. This Sarasin & Partners team has been managing global real estate funds since 2004, and as of 10 July 2009 is responsible for CHF 364 million of global real estate investments. The fund manager of Sarasin Sustainable Equity – Real Estate Global Fund is Jakes Ferguson of Sarasin & Partners, London.