Russell to boost Asia property fund exposure

By Daryl Loo

SINGAPORE (Reuters) - U.S.-based Russell Investments, which manages over $211 billion (110 billion pounds) in assets, wants to boost its exposure to Asian real estate as it sees growing markets in China and India withstanding a global downturn.

The company, which raises money from institutions such as pension funds and invests it with other fund managers, said it expects to more than double its investments in Asia properties over the next three years, from about $300 million currently.

"Our clients tell us they want to be in Asia property, and we go where our clients want to go," said Martin Lamb, newly appointed Asia Pacific head of property for Russell, the funds and indices unit of Northwestern Mutual Life Insurance.

"Regardless of the downturn in the U.S. and Europe, there is a strong domestic need particularly in India and China that continues to fuel demand for housing and retail," said Lamb, who is Russell's first property chief to be based within the region.

"There's no question that it's going to be a bumpy road if the United States plunges into a severe recession, but whereas before there was very little domestic demand in China and India, a lot of that demand can now be picked up internally," he said.

An increasing number of financial and property firms have set up funds to invest in Asia property in the past year, seeking better returns elsewhere as property markets in the U.S. and Europe face a steep downturn.

Recent fund launches include those by the property investment units of Jones Lang LaSalle (JLL.N) and Prudential (PRU.L), and by Singapore developers such as CapitaLand (CATL.SI) and Keppel Land (KLAN.SI).

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