SC Tangram is an open-ended Alternative Investment Fund (AIF) managed by Amundi Immobilier, number 1 in corporate real estate for individuals in France (source: IEIF, February 2020), specialised in creating, structuring, and managing real estate investment solutions.

For the past few months, SC Tangram has been one of the diversification unit-linked products eligible for some of the life insurance contracts offered by CA Indosuez Wealth (France). This article aims to provide a first overview.

 

Background

The Covid-19 pandemic has thrown the entire world into an unprecedented situation. What began as a health crisis has become an economic crisis amid a fairly healthy real estate market with good fundamentals: low interest rates, competitive rental yields, and a lack of excess supply.

 

Inflows and performance at 15 may 2020

Since 1 January 2020, SC Tangram’s inflows reached €141.5 million as of 15 May 2020. Net assets totalled €446 million as of the same date. The fund continued its positive trajectory with a performance of +0.69% as of 15 May 2020.

At the beginning of 2020, SC Tangram had invested in a single publicly traded real estate fund, Sofidy’s Selectirente, which declined 14% following two months of lockdown, while most real estate funds suffered much greater decreases.

The net asset value was €213,820 as of 15 May 2020 versus €212,309 as of 31 December 2019.

 

Net asset value since inception (in euros)

Click on the picture to download the graph

Unit-linked contracts have no capital guarantee and are subject to upward and downward market fluctuations. Past performance is not a reliable indicator of future results.

 

Contribution of fund assets to SC Tangram’s performance since 01.01.2020

Performance contribution (to date)	Achieved 15/05/2020
SCPI	1.66%
Club Deal/AIF	0.09%
Publicly traded real estate funds Publicly traded real estate fund activity fees Gross performance to date	-0.70% 1.04%
Management fee including taxes	-0.35%
Net performance to date	0.69%

_{Source: Amundi Immobilier figures at 15/05/2020}

Past performance is not a reliable indicator of future results.

 

Portfolio

The health crisis, which gradually turned into an economic crisis, primarily affects hotel real estate (less than 1%) and retail real estate (19.2%), which therefore account for 20% in the fund of diversification sectors. SC Tangram’s portfolio is primarily invested in offices and consists of underlying assets leased to quality tenants. In addition, the Core/Core+^[1] strategy adopted by the real-estate management company Amundi Immobilier and SC Tangram’s diversified allocation have enabled it to cope with the impacts of the current crisis.

 

Investment outlook

In terms of growth, the investment plan is in line with the five-year target allocation established when SC Tangram was created. The deployment of SC Tangram’s substantial inflows is well positioned thanks to Amundi Immobilier’s responsiveness, which allows it to seize opportunities that arise.

At the beginning of 2020, SC Tangram was mainly invested in SCPIs – real estate investment trusts – (75%) and club deals^[2] (20%), including Majunga and the portfolio of 38 assets located on rue de la République and rue du Président Carnot in Lyon.

Since the beginning of the 2^nd quarter, SC Tangram has invested in a retail OPCI – real estate investment fund – managed by another asset management company and has increased its proportion of publicly traded real estate funds, under delegated management by CPR AM (a wholly owned subsidiary of Amundi specialising in thematic funds).

New investments are expected in the coming weeks. The real estate allocation is expected to focus mainly on offices and, to a lesser extent, retail, particularly in the food sector, with the balance marginally invested in expanded residential housing. In terms of geographical location, preference is given to the Greater Paris region and the major regional metropolitan areas. Tangram is mainly positioned in Paris and its region but also beyond the Paris region. The balance is invested in Europe through real estate investment trusts, mainly in Germany and the Netherlands, primarily in office real estate. More generally, Amundi Immobilier favours the northern countries of the eurozone.

 

In conclusion, at the end of the first quarter of 2020, SC Tangram is relying on its sectoral diversification with an emphasis on offices, geographical diversification, and a conservative allocation to pursue its investment activities.

The unit-linked investment backed by SC Tangram thus remains an attractive diversification vehicle for eligible life insurance contracts having no guaranteed returns and subject to both upward and downward market fluctuations.

Note that SC Tangram is open to investment only by insurance companies and can therefore only be accessed by an insured party through a life insurance contract.

 

_{[1] Assets in the best locations with quality tenants under long-term leases. [2] A club deal is a collective investment together with other investors. By joining forces, they pool the risks, diversify their portfolio, and can purchase properties that would otherwise be out of reach.}

 

_{Under no circumstances may this article be construed as an offer to purchase a life insurance contract or capital bond, as an offer or a solicitation, or as an act of direct marketing for the purchase of financial products or services. It has not been designed and is not intended for persons in any particular country. It is not intended for persons who are citizens, domiciled for tax purposes or resident in a country or jurisdiction where its distribution, publication, availability, or use would breach the applicable law or regulations. You are encouraged to read the KIID (or the prospectus), the Key Information Document, the Detailed Notice, or the final terms and conditions of the product or service carefully before investing. Past performance is not a reliable indicator of future results, and the value of an investment may increase or decrease depending on developments in the financial markets.}