Principal launches diversified, real asset interval fund
Principal Diversified Select Real Asset fund invests in private and public real assets
Principal Global Investors today announced the launch of its first interval fund, the Principal Diversified Select Real Asset (DSRA) fund, which primarily invests in private real assets, including infrastructure, natural resources, and real estate.
“This launch reflects Principal’s commitment to meeting growing client interest and demand for products that offer access and exposure to diversifying private assets,” said Mike Beer, executive director of Principal Funds. “Throughout 2019, we have encouraged clients and investors to reevaluate risk within their portfolios. Offerings like DSRA are designed to help investors address market uncertainty and volatility.”
Interval funds, which have grown to more than $27 billion in assets under management, provide investors with exposure to less liquid investments, while granting managers greater flexibility to invest in private, non-listed assets typically aligned with longer-term investment goals. Exposure to real assets provide investors with differentiated return streams offering the potential for enhanced risk-adjusted returns and income through various market cycle environments.
The launch of the Fund is an extension of Principal Global Investor’s asset allocation boutique, Principal Portfolio Strategies, which manages multi-asset and multi-manager strategies and helps to solve investors’ need for income, diversification, and inflation protection.
About Principal Global Investors®
Principal Global Investors® leads global asset management at Principal®. As a multi-boutique firm, we bring a focused perspective and offer expertise across a host of asset classes.
At our core, we are driven by our purpose to help investors and businesses achieve their financial goals. Our global investment professionals deliver investment solutions for public and private pension funds, foundations and endowments, central banks, insurance companies, sub- advisory arrangements, sovereign wealth funds and individual portfolios.
Principal Global Investors manages approximately $442.4 billion in assets on behalf of over 800 institutional clients located in over 80 countries as well as retirement plans and individual clients, reflecting our worldwide market reach and experience and our commitment to high-quality research and service (as of March 31, 2019).
To find out more, visit us at principalfunds.com.
Principal Diversified Select Real Asset Fund is a closed-end investment company that continuously offers its shares. Investors in a closed-end fund do not have the right to redeem their shares on a daily basis at a price based on NAV per share. There is no secondary market for the Shares, and the Fund does not expect a secondary market will develop. You may not be able to sell your Shares when and/or in the amount that you desire.
The Fund is structured as an interval fund, which means it conducts quarterly repurchase offers of no less than 5% of the Fund’s outstanding shares at net asset value (“NAV”). Investors should not rely on any expectation of repurchase offers being made in excess of 5%.
Investors should consider the Fund’s shares illiquid. The ability of investors to sell shares to access their invested capital is very limited.
Investing in the Fund is speculative and involves a high degree of risk, including the risks associated with leverage and the risk of a substantial loss of investment.
Investment Risks: Real estate investment options, such as real estate investment trusts (REITs) and commercial mortgage backed securities (CMBS), are subject to risks associated with credit, liquidity, interest rate fluctuation, adverse general and local economic conditions, and decreases in real estate values and occupancy rates. Investments in companies involved in agriculture, infrastructure, natural resources and energy can be significantly affected by government policies, regulations, interest costs, surplus capacity, weather conditions, and natural disasters. Investing in derivatives entails specific risks relating to liquidity, leverage, and credit, which may reduce returns and/or increase volatility. The use of leverage increases investment exposure and has the potential to magnify losses. International and global investing involves greater risks such as currency fluctuations, political/social instability and differing accounting standards. Risk is magnified in emerging markets, which may lack established legal, political, business or social structures to support securities markets. Fixed-income investments are subject to interest rate risk; as interest rates rise their value will decline. Floating rate debt instruments are subject to credit risk, interest rate risk, and impaired collateral risk, which means that the value of the collateral used to secure a loan held by the fund could decline over the course of the loan. Lower-rated securities are subject to additional credit and default risks.
Due to the inherent uncertainty and subjectivity of determining the fair value of investments that do not have a readily available market value, the fair value of the Fund’s private investments may differ significantly from the values that would have been used had a readily available market value existed and may differ materially from the amounts the Fund may realize on any disposition of such investments.
Carefully consider a fund’s objectives, risks, charges, and expenses. Contact your financial professional or visit principalfunds.com for a prospectus, or summary prospectus if available, containing this and other information. Please read it carefully before investing.
Investing involves risk, including possible loss of principal.
Principal Diversified Select Real Asset Fund is distributed by Principal Funds Distributor, Inc.
Principal Portfolio Strategies is a specialized asset allocation boutique within Principal Global Investors, the investment adviser to the fund.
Principal, Principal and symbol design and Principal Financial Group are trademarks and service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.