Dubai-headquartered multi-family office GSB is tilting towards core real estate funds in 2023, founder and senior executive officer Ross Whatnall told With Intelligence.
With around £50m or 10% of its total portfolio in real estate, the $500m allocator is keen to gain greater exposure to capital returns through geographic diversification in developed markets, with a particular focus on the UK.
“Current exchange rates mean the UK market presents a very cheap alternative. The fact that interest rates are going up so aggressively in the UK should impact property prices, which again will present opportunities for our types of clients,” said Whatnall.
ESG-focused sectors are typically preferred across the portfolio; however, selected funds do not have to qualify as Article 8 or 9.
Shifting capital from fixed income
Whatnall revealed that the firm wants to step away from fixed income by seeking alternative sources of diversification.
“We will see a slight tilt towards real estate, but we also got to be conscious of the fact that we’re seeing interest rates rise to points that we haven’t seen since 2008, and we’re just coming out of an extremely extended period of rock bottom interest rates,” he explained.
For its real estate portfolio, GSB keeps a broad-based approach, primarily focusing on developed market-focused funds. It is biased towards big cities such as New York, Paris, or London.
The investor does not have a specific amount of dry powder as it is readjusting its portfolio by pivoting away from its fixed-income commitments this year.
“We would shift the fixed income funds we have at the moment to those types of funds. It’s not that we have cash set aside for this. It would be more of a simple adjustment to our current holdings,” said Whatnall.
The firm does not have a specific range for tickets.
Wants established GPs with ten years of track record
GSB is open to managers with at least ten years of track record. Minimum AuM requirements hover at around $10m.
“We wouldn’t typically work with funds with management fees in excess of 1%. Ideally, it’s below around 0.5% as we’re looking to keep charges well under 1% on a client’s portfolio,” said Whatnall.
Cost and performance remain GSB’s main guidelines for manager selection, while its efforts towards ESG integration continue to grow.
“There is a good synergy between being low-cost, being ethical, and being aligned with UNPRI signatories. Articles 8 and 9 are not something that we require, but it is definitely a bonus,” explained Whatnall.
Launched in 2021, GSB has split between three divisions: a retail business for its mass affluent clients which involves an ESG focus, a private client business biased on private lending for HNW, and a private office offering private equity and venture capital opportunities for UHNW.