Mercer New Zealand Taps Local Manager for Residential Property Exposure

Mercer New Zealand has partnered with local investment manager New Ground Capital to bring residential property exposure to its Mercer Unlisted Property Fund. The move aims to address the underrepresentation of residential real estate in portfolios, particularly in New Zealand and Australia compared to global ones.

The fund, seeded from Mercer's existing Unlisted Property Portfolio, will have an initial allocation with New Ground Capital, which will source and manage the assets. The investment manager has made a co-investment to align its interest with the fund, representing around 26% of Mercer's existing Unlisted Property Fund if fully deployed today.

The strategy targets inflation-resilient income with potential residential capital growth by investing in residential properties across New Zealand and leasing them to government and community housing providers. This approach aims to create a stable long-term rental income stream and capture the structural benefits of residential property, according to Del Hart, Mercer New Zealand's chief investment officer.