The Perpetually Developing Market: Property Derivatives Have Been Around for Some Time But Could Be About to Enter a New Era
The first week of October 2010 could be remembered as a very significant week in the history of commercial property investment, both in the United Kingdom and further afield. It was a week that saw the latest step in a line of innovative developments that have driven the growth of the property derivatives market over the years.
This latest announcement was the launch of the first ever long-only property derivatives fund. Hedge funds have used property derivatives within their trading strategies, and traditional property funds have used them in managing their direct property port-folios for some time. But this is the first time that property derivatives have been the sole focus of an investment fund’s strategy, and the first time that they have been used without any other property instrument to try to track the property market in the United Kingdom.