VICTORIA Mutual Wealth Management (VMWM) last week launched an investment product, IWC Opportunity Fund 1, geared towards investors interested in the equity real estate market in New York City (NYC).

The fund, which is targeted at multi-family residential and commercial real estate investment acquisitions primarily in Brooklyn NYC, is to be managed by IWC Capital Management, LLC, a New York-based private equity firm which invests primarily in real property and real estate-related assets. The firm is headed by Matthew Wright, a former vice-president, infrastructure finance group at Citibank Global Capital Markets in New York.

At the launch, held at the Terra Nova All-Suite Hotel in Kingston, Wright noted that well capitalized, cash rich investors now have a significant advantage in negotiating acquisitions from distressed sellers in the secondary NYC markets. According to Wright, the US property market is now characterised by overleveraged investors, unprecedented foreclosure rates, and expanding real estate-owned (REO) bank portfolios. Over the past 10 years, NYC multi-family apartment buildings — the targeted acquisitions — have experienced average annual price appreciation of 11.7 per cent, beating most other asset classes.

The IWC Opportunity Fund 1 is being offered close to the end of a five-year bust cycle in the real estate market in the city. Wright noted therefore, that this is an opportune time to enter the market as that cycle could end soon and the boom cycle, which has historically lasted about 10 years, is about to begin. The IWC fund has a seven- year term.

The fund’s objective is to provide shareholders with a combination of investment income and capital appreciation through equity investments in the private real estate market primarily located in Brooklyn. Targeted return is approximately 18 per cent per annum, with dividends paid semi-annually. The minimum investment is US$250,000, subject to reduction at the discretion of the board of directors to accredited investors, but no investment can be less than US$50,000.

VMWM general manager Devon Barrett said the fund provides a great opportunity for investors to truly diversify their portfolio and to benefit from the acquisition of assets that they would find difficult to acquire on their own.

“We decided to participate in this issue because we think it allows Jamaican investors the opportunity to participate in a new asset class, New York residential real estate, at significantly reduced prices without having to individually acquire those real estate assets,” said Barrett.

“It can also give our investors the opportunity to diversify their currency position by investing in a foreign currency and achieving higher returns than most other asset classes based on the expected continued renewal of the area and the history of high cyclical growth rates in New York,” he added.