Ext. Funds Experience & track record Very expensive (Active) Reduced internal staffing required In-specie transfer? Management resilience? Investment Income? Ext. Funds Certain of performance Performance from asset allocation decisions only (Passive) Comparable cost to internal, active Transition risks and costs (much less than Ext. mgmt. Man. (IMA)) Reduced internal staffing required Investment Income? Property Mix of direct property Mgmt.: <1 WTE (est. Currently, experience at the Fund of Resilience (existing staffing arrangement too £254m & indirect collective <1 WTE) this arrangement small) 7% investment vehicles Admin.: (Fund makes No ownership transfer needed in near Key man risk Non-discretionary (key man the future Staff retention until pooling external management risk exists) & needs decisions) Existing staff to potentially draw from agreement investment to meet for Legacy Assets / Governance Long term increase potential future (Mgmt. & Admin.) allocation (to 10%) demand Pool Access to other markets (long term) Pool not ready for direct property for 3-5 years Potentially reduced fees Ownership transfer tax? – solicitors?) Unknown future investment strategy/staffing Discretionary Experience & track record of mgmt. No experience at the Fund of this arrangement No ownership transfer needed in near resource still required future Loss of control Reduced internal staffing required Transparency (Mgmt. only) Management resilience? Ext. Experience & record Sale of existing portfolio? Reduced internal staffing required Expensive Management resilience? Lack of transparency Income? Management resource needed for PUTs/LLPs Admin resource for draw-downs & receipts (LLPs) Redemption timetable
Ext. Funds (Active) Experience & track record Reduced internal staffing required Management resilience? Very expensive In-specie transfer? Investment Income? Ext. Funds (Passive) Certain of performance Comparable cost to internal, active mgmt. Reduced internal staffing required Performance from asset allocation decisions only Transition risks and costs (much less than Ext. Man. (IMA)) Investment Income? Property £254m 7% Mix of direct property & indirect collective investment vehicles Non-discretionary external management agreement Long term increase allocation (to 10%) Mgmt.: <1 WTE (est. <1 WTE) Admin.: (key man risk exists) & needs investment to meet potential future demand (Fund makes the decisions) Currently, experience at the Fund of this arrangement No ownership transfer needed in near future Existing staff to potentially draw from for Legacy Assets / Governance (Mgmt. & Admin.) Resilience (existing staffing arrangement too small) Key man risk Staff retention until pooling Pool Access to other markets (long term) Potentially reduced fees solicitors?) Pool not ready for direct property for 3-5 years Ownership transfer – tax? Unknown future investment strategy/staffing Discretionary Experience & track record of mgmt. No ownership transfer needed in near future Reduced internal staffing required (Mgmt. only) Management resilience? No experience at the Fund of this arrangement resource still required Loss of control Transparency Ext. Experience & record Reduced internal staffing required Management resilience? Sale of existing portfolio? Expensive Lack of transparency Income? Management resource needed for PUTs/LLPs Admin resource for draw-downs & receipts (LLPs) Redemption timetable
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