May 2020

On behalf of the QIP team, we hope our clients, business partners, families and friends continue to stay safe and keep well as we move through 2020.

Adapting to Change – The 3 R’s

At QIP, we have found ‘The 3 R’s’ to be a helpful framework in understanding how we adapt to our new investment landscape, particularly in the real estate markets.  We do this through the lens of both an investor and fund manager during the current CV-19 pandemic.  This has meant:

  1. Responding swiftly to protect our people and assets

  2. Resiliency in managing the impact of change

  3. Re-imagining the new norms and the opportunities they present us

 

While this framework will guide us through our new reality, our DNA of only investing in real estate markets where we have Experience, Expertise and Execution capabilities remains.

 

Our New Investment Landscape and Strategy

 

Over the last 20 years, we have witnessed the journey of the UK Purpose Built Student Accommodation (“UK PBSA”) Sector from a niche investment class to a core institutional investment class. Now, the sector is entering a new and unexpected landscape fraught with challenges, including:

  • UK universities being financially tested

  • International student demand being questioned

  • Live projects and developments being halted

  • Students requesting refunds for their academic and accommodation fees

 

The impact of these challenges in each of the 77 UK PBSA markets is fragmented, with some markets being less dislocated than others.  From this dislocation arises opportunity and a corresponding ‘Flight to Quality’ by investors.  The challenge for investors will be redefining “Quality” assets in the new social and economic circumstances ahead.  

 

At present, we are beginning to see unique opportunities emerge in the sector and we anticipate this will only increase over the next 6-18 months.  These opportunities are far-reaching across the real estate life cycle and the whole spectrum of debt and equity .  QIP’s strategy is to remain nimble with ready capital to invest across these opportunities in the sector.  

 

Track Record – Experience, Expertise & Execution

 

As a team, QIP has benefited from the investment track record it’s Principal delivered through the last financial crisis.  In 2009-2012 in UK PBSA projects, 20% IRR net return after tax was delivered.  We have the Experience and Expertise in capturing opportunities in the sector through crises and confidence in our Execution.   

 

At QIP, we are Responding to these challenges and opportunities by undertaking a broader investment approach across the risk curve in debt and equity.  We believe this will enable us to implement more Resilient strategies and truly capture what we Re-imagine the sector’s new reality to be.

 

Investment Philosophy

 

At the core of our investing is our commitment to the following:

  1. Preserve our investment capital

  2. Deliver sensible risk-adjusted returns

  3. Report thoroughly, transparently, and timely 

  4. Create a collaborative and educational investment experience

 

We hope our observations and perspectives are insightful. We look forward to work together with you as we navigate our new reality.

© Q Investment Partners 2020