JPMorgan Global Core JPM Glbl Core - JARU JPM Glbl Core - JARE - Capital Call and Portfolio Update

JPMorgan Global Core Real Assets

04/03/2022 07:00

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RNS Number : 6048D  JPMorgan Global Core Real Assets Ld  04 March 2022

JPMORGAN GLOBAL CORE REAL ASSETS LIMITED

 

Capital Call and Portfolio Update

 

Legal Entity Identifier: 549300D8JHZTH6GI8F97

Capital Call

JPMorgan Global Core Real Assets Limited (the 'Company' or 'JARA') is pleased
to announce that $11.1m of the Company's committed capital has been called and
funded into the US Real Estate Mezzanine Debt strategy. This investment will
take JARA to being effectively 100%(1) invested and was funded from its cash
balance and by reducing the liquid real asset allocation portion of JARA's
portfolio.

This investment will provide JARA with exposure to a portfolio of 15 existing
loans with a bias towards multifamily and office loans. The weighted average
duration of the portfolio of loans is 2.7 years. At full investment and with
the addition of the Mezzanine Debt strategy, the Company will have positively
increased its sensitivity to rising interest rates, given the Mezzanine
strategy's 64% exposure to floating rate loans. This allocation will also help
to increase JARA's portfolio income as the underlying Mezzanine strategy has
provided an income of 7.4% over one year and an annualised return of 6.9%
since inception(2). Target total returns for the Mezzanine strategy are 7-9%
gross and 6-8% net(3), this return will be primarily income orientated.

In 2021 commercial real estate markets were on a very positive path.
Investment sales volumes were strong, debt flows remained high, and core real
estate equity returns climbed to approximately 20% for the full year. Core
real estate mezzanine debt benefits from these strong underlying fundamentals
and continues to offer an attractive relative value to other fixed income
investment products seeking similar current income return.

The funding has changed JARA's asset allocation, which, based on its exposures
as of its last NAV (30th November 2021) are as per below. Updated exposure
details including more granular sector and currency exposures will be released
alongside JARA's next NAV which should be available in due course. The impact
of this recent allocation to JARA's portfolio yield will be effective from
April.

                     Total Exposure  Private Asset Exposure  Public Asset Exposure
 Real Estate Equity  47%             38%                     9%
 Real Estate Debt    8%              4%                      4%
 Infrastructure      23%             17%                     6%
 Transportation      21%             18%                     3%
 Total               100%            77%                     22%

 

As at 25th February 2022. Numbers may not sum due to rounding.

 

Portfolio Update

The Manager would like to highlight that JARA's portfolio and its underlying
strategies are performing as expected and JARA's portfolio is not directly
exposed to Ukrainian or Russian assets, either on a NAV or income basis. The
Manager believes that the global geographic and asset level diversification,
coupled with the core nature of the portfolio assets and exposure to
non-sterling assets, means JARA is well positioned to weather the current
volatility.

 The current market and political volatility, added to what was already an
inflationary environment, is focusing investors' minds on robust defensive
strategies that combine both reliable income and opportunities for capital
growth. JARA has delivered strong NAV total returns since its portfolio has
been near fully invested and recent events, both geopolitical and macro in
nature, serve to underscore the attractiveness of JARA's differentiated
offering and attractive risk / return value proposition. The addition of the
Mezzanine strategy should further bolster this mix and shows the flexibility
of the JPM platform in being able to adapt to changing market conditions.

 

(1) c.1% of capital remains uninvested for cost and liquidity requirements

(2) Mezzanine Strategy inception 5th December 2019

(3) The difference between Net and Gross return is due to management fees
levied

 

4th March 2022

Alison Vincent

JPMorgan Funds Limited - Company Secretary

Telephone 0207 742 4000

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