While most fund managers are busy chasing new funds the Calan Healthcare Properties Trust is restricting entry as it's got too much money coming in.
The trust, whose flagship investment is the recently opened $52 million Ascot Hospital in Ellerslie, has moved to restrict entry into its fund and in some cases close it to new investment.
General manager Chris Donahoe says advisers who have supported the trust have been given allocations of new units to use up by May 31, and the fund has been closed to advisers who haven't been big supporters of the trust.
The trust has been popular with investors as it has offered a strong yield in a low interest rate environment. In the 12 months to December 31 the fund gave investors a gross yield of 7.56 per cent, while over three years the yield was 10.43 per cent.
Donahoe says taking in more money would dilute income returns.
"By restricting entry to the trust we are defending existing investors," he says.
Also, the manager has worked out its future capital requirements and doesn't need to keep raising funds.
Currently the fund has gross assets of $144 million, including $20 million in cash. The cash and the money raised from the units allocated to advisers will be used to buy 2 ha of land adjacent to North Shore Hospital, and to build a new private medical and surgical centre.
Calan has recently entered into a heads of agreement with Waitemata Health to buy the land. It will then build the centre which will have 4-6 operating theatres and 20 patient rooms.
Calan anticipates the new centre will stimulate relocation of services on the North Shore and there is future potential for the site to develop into a health park.
Donahoe says restricting entry to the trust is "a clear signal to begin the listing process".
He says Calan is now looking to its next investment vehicle. It will be either an Australian healthcare property trust, like the New Zealand one, or it will be an international healthcare fund done in conjunction with "one of the world's best fund managers," he says.
While most fund managers are busy chasing new funds the Calan Healthcare Properties Trust is restricting entry as it's got too much money coming in.