TM Gravis UK Listed Property

Gravis specialises in infrastructure and real estate investments, taking a long-term approach and seeking stable, predictable returns by investing in companies with sustainable business models and long-dated, dependable cash flows. Matthew and the team follow the same philosophy, focusing on UK-listed property securities.

The primary sectors in which they find secure and forecastable income are healthcare, industrials, logistics, offices, housing and student accommodation. The fund targets four key themes across the real estate sector: an ageing population, digitalisation, urbanisation, and generation rent. Matthew actively seeks opportunities expected to benefit from these trends. The fund has minimal exposure to the retail sector, which they believe lacks compelling and stable opportunities.

Matthew uses both internal and external research to inform his investment decisions. Internal quantitative analysis forms part of the process, including assessments of rental growth, profit margins, balance sheet leverage, valuation premiums/discounts and dividend yields. These metrics support the team’s asset valuation methodology and franchise value estimations. Matthew also attends conferences, meets regularly with company management teams, and incorporates external research from specialists such as Stifel.

New positions will generally be entered gradually and considered over a long period of time. This is largely because a potential investment must meet the criteria of whether it’s exposed to the four key themes, that it can sustainably grow its rents, and finally that it is priced attractively. The output of their process is a fund that typically contains around 20 holdings.

The fund is likely to have a low correlation to both equities and bonds, displaying defensive characteristics with many of its investments having inflation-linked cash flows. It should also demonstrate lower volatility than the broader market, owing to its focus on predictable cash flows that help reinforce valuations. Risk is managed through diversification across real estate subsectors and by targeting high-quality companies with relatively low leverage. A daily liquidity report is produced to monitor sector liquidity, with the fund also targeting investments that trade in volumes exceeding £400 million per day.

The fund excludes investments in companies with significant involvement in controversial activities, including armaments, alcohol, gambling, pornography, non-medical animal testing, and tobacco. Ethical screening is conducted on all portfolio holdings, and ESG issues are factored into investment decisions. For a holding to be deemed suitable, it must demonstrate a commitment to environmental improvements. The team also engages with companies to promote positive corporate practices, improve ESG disclosure, and ensure adherence to their stated policies.