Unlisted property fund manager PMG cracks the $1 billion mark

12:08 pm today

An office building in Christchurch, owned by PMG's Pacific Property Fund.

Photo: Supplied / PMG Funds

Tauranga-based PMG Funds has passed $1 billion in assets under management, with the company targeting further growth of its flagship fund.

PMG manages a number of unlisted property funds, which retail and wholesale investors can take part in.

Since moving to the unlisted fund model in 2014, PMG has returned more than $190 million in gross cash distributions to its retail investors.

Among its goals was expanding its flagship Pacific Property Fund, to create the country's biggest diversified unlisted commercial property fund.

The Pacific Property Fund was still led by Denis McMahon, who founded PMG in 1992.

PMG chief executive Scott McKenzie said it would be relying on its tried and tested formula to continue growing.

"The fund itself is intentionally weighted towards the industrial sector - it's been a resilient sector for a number of decades, so that weighting will continue," he said.

The fund was also heavily invested in large format retail, with the company acquiring the newly-built Mitre 10 Mega Prestons Rd, in Christchurch.

McKenzie has led the business since 2012, when the company's assets under management were valued at $88m.

He remained a firm backer of the unlisted model.

"Unlisted property funds have a different risk-reward profile to listed property vehicles, with performance underpinned by fundamentals such as occupancy, rental income, tenant quality and active asset management rather than short-term market sentiment," McKenzie said.

"This leads to characteristics like typically lower valuation volatility and the potential for more consistency of income, which can appeal to long-term investors without immediate liquidity needs."

While listed funds were "not on the road map" for PMG, McKenzie did not rule them out in the future.

"If at a point in the future it was appropriate for investors and shareholders to consider that listed environment by way of liquidity or access to capital, then we'd certainly look to go down and have a conversation with our investors about that."

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