Property managers back derivatives fund launch

Some of the largest real estate managers are backing the launch of the UK's first property derivatives fund.

The vehicle offers returns linked to the IPD UK benchmark property index, through the use of swaps and futures contracts, the Financial Times reports. It will be launched by a new group, inProp Capital, created by former members of Bank of America's property derivatives team. The fund has been seeded by the SWIP Property trust, Skandia Property fund and Prudential's real estate fund manager PRUPIM. While derivatives form an important part of many asset classes, so far the instruments have struggled for the property market. Derivatives trading volumes increased during the boom bu...