“There is already some co-investment going on with the Saudi Arabian fund,” he told attendees at the event in London.A spokeswoman for the GIB said she was not familiar with the fund alluded to by the MP, but added that any fundraising announcements would be made in due course.The bank earlier this week singled out pension and sovereign wealth funds as the target market for its wind farm vehicle.Saudi Arabia’s central bank, the Saudi Arabian Monetary Authority, has so far managed the currency reserves and revenue from the country’s oil production – estimated at $730bn (€536bn) – but there have been discussions to launch a formal sovereign wealth fund.The GIB’s chief executive, Shaun Kingsbury, was also confident pension funds would be interested in the proposed wind farm fund, as he said the asset class was “perfect” for the industry due to its low operating costs and resulting high cash outflows.A trustee of the BT Pension Scheme previously said banks such as GIB would be “quite critical” in creating co-investment vehicles that would allow for the financing of smaller deals, sharing out the risk of each transaction.Kingsbury joked that he would need “a little while” before the next fund was announced, as the wind farm vehicle was only unveiled this week, but he was nonetheless positive about its potential impact on the market.“We will see if we can get BT interested in the first [fund], and then of course if we do it and it works, and it’s successful, then the market will copy us,” he said.“Then, not only will we be raising the next fund, but there will be other folks out there doing it, and that’s great.” The UK’s Green Investment Bank is “very confident” it will be able to attract third-party capital to its investment funds, as wind farms are the “perfect” asset for pension schemes.Lord Smith, chairman of the state-backed institution, said that while the £1bn (€1.2bn) offshore wind farm fund was only recently announced, the GIB had done “a wee bit of homework” and was sure it would see outside investors commit capital to both the fund and the fund management subsidiary.Speaking as the bank launched its annual report, Michael Fallon, government minister in the Department for Business, Innovation & Skills and Department of Energy & Climate Change, indicated that Lord Smith’s certainty could stem from more than simple confidence.The Conservative MP said that while privatisation of the GIB was one option for attracting private capital, co-investment with other institutions would be another “preliminary route” that would enable the bank to become an “enduring institution”.
Mark Fawcett, CIO at the National Employment Savings Trust (NEST), has warned of “regret risk” when investing in alternative indexing.The state-backed defined contribution (DC) master trust has around £162m (€205m) in assets and recently announced two emerging market equities mandates using alternative indexing.It also amended its investment beliefs to mirror a move towards alternative indexing, suggesting index investing will in the long-run provide better returns in terms of risk, return and cost than active management.It had amended its previous statement that passive investing was generally superior to active management. However, Fawcett told IPE the fund simply wanted to acknowledge alternative indexing could be a good and cost-effective way to manage investments.“One of the biggest risks about alternative indexing is the regret risk,” Fawcett said.He warned against immediately comparing alternative index returns to market capitalisation returns.“People can fall into the traditional story of going into something that then underperforms,” he said.“We were very careful when we made our emerging market decisions not to be just chasing success.”The fund has a 1.5% allocation to emerging market equities thus far, but Fawcett said the procurement was now in place to allow it to move to market, or overweight, when the internal team deemed it appropriate.Despite the recent foray, NEST’s internal asset allocation team said it was not looking to make the default investment fund overly complex.“We’re not looking to make this complex because that’s interesting and fun,” Fawcett said.“As we get bigger and more sophisticated, managing the dynamic risk allocation will be more important.”Fawcett did concede that recent Budget changes could force the UK’s largest master trust, with more than 1m members, to develop more complex fund choices for members.It will research possibilities for low-cost drawdown given the current strategy is aimed purely at annuitisation – a product expected to diminish given the DC at retirement freedoms from April 2015.Fawcett will evaluate the default investment strategy, and the appropriateness of target-date funds for members approaching retirement.Some 99% of NEST members are currently invested in the default strategy despite additional options for ESG, low-growth, higher-risk and Sharia-compliant funds.“The default strategy will remain important, but we may offer some choices alongside that, and they do not have to be target-date,” Fawcett said.“We are thinking around post-retirement date funds. But we are trying things out and are not close to decisions.”Seperately, NEST will consider offering the building block funds of its default investment strategy as individual options for members.
Five US public sector pension funds are to divest from companies that boycott investment in Israel after a state government passed new legislation forcing the move.The US state of Illinois saw its House of Representatives and Senate both unanimously pass legislation requiring five state-funded pension schemes to identify all companies that boycott Israel and divest their direct and indirect holdings.The term ‘boycott’ is defined as any company that engages in actions that are politically motivated or intended to penalise or inflict economic harm on Israel or companies based within it.With the decision, Illinois aims to block pressure groups’ attempts to further the ‘boycott, divestment and sanctions’ (BDS) movement against Israel. The move runs counter to divestment decisions made by some of Europe’s largest institutional investors.While European Union policy does not support any BDS movement, some investors have been accused of succumbing to pressure and divesting direct holdings in Israeli companies.In January last year, PGGM, the €189bn asset manager and main investor for the Dutch healthcare worker scheme PFZW, divested from five Israeli banks involved in funding settlements in areas of Israeli occupied Palestine.The NOK7trn (€806bn) Norwegian Pension Fund Global also excluded property and construction companies operating in Israel for the same reason.The investor’s Council of Ethics said there was a risk two companies operating in Israel were “contributing to serious violations of the rights of individuals in situations of war or conflict”.PGGM’s decision, which was made after client PFZW asked it to engage with the banks, came under fierce criticism and created a political storm resulting in the Dutch ambassador being summoned by the Israeli government, and protests outside its offices.However, the asset manager said its decision came after repeated attempts to engage with the banks; when engagement failed, it said, divestment was its only remaining policy.PFZW launched an extensive review of its SRI and divestment policies after facing criticism and allegations of a pro-Palestinian bias.The pension scheme made no amendments to its policy but acknowledged that it underestimated the political nature of its decision and said it would work on its communications in future.In the US, the Illinois pension funds will have to divest from boycotting companies by the start of 2016.It affects the nearly $77bn (€69bn) in assets held in the Illinois Teachers’ Retirement System, Illinois State Universities’ Retirement System, Illinois State Employees’ Retirement System, Illinois Judges’ Retirement System and Illinois General Assembly Retirement System.Writing in US newspaper The Washington Post, Eugene Kontorovich, a professor at Northwestern University, said the move by the US state should not be underestimated.He wrote: “The Illinois bill is part of a broad political revulsion over the long-simmering BDS movement.“While BDS has gotten most of its successes with low-hanging fruit like British academic unions and pop singers, the anti-boycott efforts are getting an enthusiastic reception in real governments, on the state and federal level.”
UK-based asset managers are not expecting major upheavals to EU-domiciled funds from the country’s departure from the EU, according to experts.As UK prime minister Theresa May today begins the two-year process of negotiations with her EU counterparts, the country’s financial services sector is bracing for fundamental changes to its relationship with its biggest overseas market.Data from trade body the Investment Association (IA) showed that UK investors had £105.3bn (€121.3bn) invested in non-UK domiciled funds at the end of January. Ireland and Luxembourg are the primary homes for these funds. Meanwhile, non-UK investors had £67.6bn invested in UK-domiciled funds managed by IA members.However, commentators have played down the impact of Brexit negotiations on cross-border investors. David Suetens, managing director of State Street in Luxembourg, told IPE it could prove difficult post-Brexit to sell funds domiciled in Luxembourg or Ireland into the UK if fund passporting rules are affected. However, the global appeal of these funds could mitigate this effect, he said.“Luxembourg and Irish funds are for the most part cross-border products recognised and distributed worldwide,” Suetens said. “Even if the passport were lost, regulations will nevertheless still be aligned, which should allow for sale into the UK as is already the case in other non-EU states. Luxembourg funds are registered for distribution in 70 countries worldwide.”For EU investors in UK funds, Suetens said there could be “some re-shuffling of products and investors”.“Promoters will most likely re-direct EU investors to EU-based vehicles and keep OIECs [UK investment vehicles] as local distribution products,” he said. “This said, to the extent regulatory frameworks for funds remain comparatively equivalent between the UK and the EU, and consumers are still allowed to purchase cross border… the choice ultimately will still reside with the investor who will ultimately set the course.”State Street recently helped M&G – the asset management arm of British insurance giant Prudential – set up a Luxembourg SICAV to help distribute its products on the continent. Suetens said the process – which began before June 2016’s historic referendum – was unaffected by the Brexit-related uncertainty.“Once the decision was made to set up a cross-border platform outside the UK and specifically in Luxembourg, the rules and process to follow were quite clear,” he said.Julian Korek, global head of compliance and regulatory consulting at Duff & Phelps, said the success of EU fund domiciles such as Luxembourg and Ireland meant there was “no real need for managers to move wholesale operations abroad” from the UK.However, Diala Minott, corporate finance partner at law firm Paul Hastings, said some asset managers still faced the task of convincing important staff to move away from London.“We have seen some regulatory arbitrage occurring in the industry with managers worrying about how they will convince their best talent to move way from London,” she said. “In most cases, the decision will come down to personal preferences as well as what historical infrastructure asset managers have in certain European jurisdictions.”Cutting ties with Europe could open more opportunities for the UK asset management sector to sell its own funds into other markets outside Europe, Duff & Phelps’ Korek added. He highlighted Hong Kong, Singapore, Canada, and India as four markets with which he expected trading flows to strengthen.However, Michael Collins, CEO of private equity trade body Invest Europe, urged his members to prepare for a worst-case scenario.“The Brexit negotiations will be unprecedented in their complexity and even if all the issues cannot be settled in two years an extension of the talks or a transitional deal is far from guaranteed,” Collins said. “We advise all our members to consider the consequences for their activities of a UK exit from the EU in March 2019 without a deal on the future relationship.”Fund passports for alternatives – introduced under the EU’s Alternative Investment Fund Managers Directive – could be affected by Brexit, he added. “An investor in one of the 27 remaining EU countries wanting access to UK-based funds might consider drawing up a contingency plan,” he said.
These two segments would make up 7% of the portfolio, the asset owner said, once the new strategy was fully implemented over the next three years.“Compared to public corporate bonds these asset classes offer additional return and increase diversification in the overall portfolio,” Publica said.Credit Suisse’s latest Pensionskassen Index for the second quarter of 2018 showed this shift in allocation was in line with a general trend.The analysis of a representative sample of the Swiss pension industry showed an increase in real estate exposure by 44 basis points, to 22.84% on average.“This development can mainly be explained by an increase in indirect real estate investments abroad,” Credit Suisse stated in a press release.Alternative investments were also increased to just over 6%. For all other asset classes the analysts reported a slight decline, mainly caused by market effects.Over the first half of the year foreign equities were the only asset class to return over 1%. Other positive contributors were real estate and alternatives with gains of just under 0.5% each.However, these returns were not enough for an overall positive average return at the end of the second quarter: at the end of June Swiss schemes had lost 0.48% on average, despite a “significant recovery” in April.Credit Suisse said that both foreign and domestic bonds had underperformed their respective indices. Switzerland’s biggest pension investor has adapted its investment strategy to “reduce risk” across its portfolio.The CHF39.8bn Publica, which caters for public sector workers, started to reduce its equity quota in July, from 29% to 27%. In turn it increased its international real estate allocation from 4% to 6%.It also reduced the exposure to Swiss non-government bonds by 200 basis points to 8%, and said it would use the proceeds to make investments in private real estate financing and emerging market debt.Money from reducing investments in non-Swiss public corporate bonds would go into “private company and infrastructure debt”, Publica said.
Border to Coast will work with external managers to build diversified global portfolios over the longer term. Investments are selected using a robust investment process incorporating principles of responsible investment, the pool said.As part of its due diligence process, Border to Coast is developing longer-term relationships with key industry participants to enable partner funds to collectively benefit from their investments in private markets.Daniel Booth, Border to Coast chief investment officer, said: “We very much appreciate the confidence shown in Border to Coast by our partner funds, with larger-than-anticipated commitments.”For its private credit offering, Border to Coast has secured £581m from eight partner funds, which launched in October. These commitments are to be invested by 31 March 2021 as part of a programme to provide a diversified global private credit portfolio over the long term across direct lending, real assets, mezzanine/speciality and stressed/distressed.As for private equity, the firm secured £500m from eight partner funds. These commitments are to be invested by 31 March 2020 as part of a programme to provide a diversified global private equity portfolio over the long term across buyout, special situations, growth and venture strategies.To date, Border to Coast has made investments in:GreatPoint Innovation Fund II ($40m)Palatine Private Equity Fund IV (£40m)Baring Asia Private Equity Fund VII ($60m)These commitments provide exposure to several Border to Coast’s targeted themes within private equity, which include operational value add, healthcare, technology and Asia.In infastructure, the firm has secured £675m from 10 partner funds, which are to be invested by 31 March 2020. This offering will provide a diversified global infrastructure portfolio over the long term across core, core+ and value add/opportunistic strategies.To date, Border to Coast has made investments in:Brookfield Infrastructure Fund IV ($125m)Global Infrastructure Partners Fund IV ($60m)These commitments provide exposure to several Border to Coast’s targeted themes within infrastructure, including operational value add and emerging markets. Private EquityInfrastructurePrivate Credit CumbriaDurhamEast RidingSouth YorkshireSurreyTeessideTyne and WearWarwickshireBedfordshireNorth Yorkshire CumbriaDurhamEast RidingSouth YorkshireSurreyTeessideTyne and WearWarwickshire Border to Coast Pensions Partnership, one of the largest public sector pension pools in the UK with total assets close to £45bn (€52.7bn), has secured investments worth £1.8bn for three of its investment offerings.These commitments will be invested over the next 18 months, and are in addition to the £15bn the pool already manages.Border to Coast has now launched its private markets offering, a year ahead of schedule to meet emerging partner funds needs, according to a statement.It is an important step in making a difference to outcomes for its Local Government Pension Scheme (LGPS) partner funds by seeking to enhance risk-adjusted, net of fees, returns from private market investments, it added. BedfordshireDurhamEast RidingNorth YorkshireSouth YorkshireSurreyTyne and WearWarwickshire
Japan’s Government Pension Investment Fund (GPIF) has announced a partnership with Inter-American Development Bank (IDB) promote and develop sustainable capital markets through a focus on social bonds.IDB’s social bonds are issued in alignment with Social Bond Principles, which are administered by the International Capital Market Association (ICMA), a statement said.GPIF last year invested in green, social and sustainability bonds totalling more than $3bn (€2.7bn).The fund tweeted this week that to further promote environmental, social and governance (ESG) integration in fixed income investments, it had over the past year entered into partnerships with 10 multilateral development banks, IDB being the latest.. It had inked partnerships with key institutions that include the Washington-based World Bank, its subsidiary, International Finance Corporation (IFC), the Asian Development Bank, Nordic Investment Bank and the European Investment Bank.GPIF said its arrangements with the various banks opened the door to asset managers investing on behalf of GPIF to access ESG bonds.These bonds provided investment opportunities for GPIF asset managers to contribute to a more sustainable society.Announcing its partnership with IDB, Hiro Mizuno, GPIF’s executive managing director and chief investment officer, spoke of IDB’s “life cycle” approach towards solving the challenges of poverty and inequality in Latin America and the Caribbean through commitments to improve the quality of child education and the provision of greater employment opportunities.Claudia Bock-Valotta, vice president for finance and administration at IDB, said the arrangement with the bank followed its initiative with the Council of Europe Development Bank (CEB).In addition to conventional bonds, GPIF has formed a partnership with the Islamic Development Bank (IsDB) to promote and develop sustainable capital markets through a focus on green and sustainable sukuk.Sukuk are the Islamic equivalent to bonds. However, unlike conventional bonds, which simply confer ownership of a debt, sukuk grant the investor a share of an asset, along with commensurate cash flows and risk.The financial instrument adheres to Islamic laws, sometimes referred to as Shariah principles.Zamir Iqbal, vice president and chief financial officer of IsDB, said at the signing of the agreement with GPIF last month that IsDB was a natural partner for GPIF in an initiative that would catalyse investments into the ESG fixed-income space and further develop socially resposible investment markets.
“In this scenario the trustee had a pot of money to secure benefits greater than PPF levels of compensation, and they wanted to secure benefits that were as high as possible,” said Rachel Cutts, origination and execution director for Legal & General Retirement Institutional.“The benefits that can be secured in cases like these are fully dependent on the insurer’s pricing, so it’s very different to a typical transaction where the insurer is providing a price for a given set of benefits,” she added. “It’s more involved and it requires collaboration between all parties.” Hetal Kotecha, director at professional trustee firm Independent Trustee Services, said the scheme it had secured benefits for members that were “far higher than we could have hoped for when we started out on this journey”.Legal & General said the transaction was structured in a way that provided the flexibility for additional benefits to be secured in the future, as the trustee expected to receive additional recoveries from the ongoing insolvency proceedings.Richard Mills, partner at LCP, which advised the trustee on the transaction, said the transaction was structured in a way that wold allow the trustee to top up members’ benefits when further recoveries were received during the ongoing insolvency proceedings.“The policy gives the Trustee significant flexibility if the insolvency proceedings take time to resolve,” he said.Looking for IPE’s latest magazine? Read the digital edition here. The Countrywide Farmers Retirement Benefits Scheme has agreed a £100m (€109m) bulk annuity deal, confirming the grounds on which it exited the assessment period for the UK’s defined benefit lifeboat fund last year.The transaction, with Legal & General Assurance Society, secures the benefits of 360 deferred members and 712 retirees.The pension scheme entered the Pension Protection Fund (PPF) assessment in March 2018 after the insolvency of its sponsor, a rural retailer, livestock feed and energy supplier. It exited the PPF assessment in November 2019 after being deemed to be overfunded on a PPF measure. The next step was for the pension scheme to come to market and get quotes from insurers, with the deal announced today, known as a “PPF+” transaction, being the outcome of that process.
Buyers from across the country will descend on Royal Pines Resort on Monday in the hope of snapping up at least one of the more than 100 properties going under the hammer.The Event kicks off at 10am.A number of agencies across the Coast held auction events this week, including Professionals John Henderson Real Estate, Amir Mian Prestige Property Agents, Lucy Cole Prestige Properties and multiple Ray White offices.First National Real Estate Surfers Paradise and Ray White Gold Coast South Network are among the agencies that will hold auction events next week. MORE NEWS: How to earn $87,460 more instantly Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 1:44Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -1:44 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels720p720pHD540p540p288p288p180p180pAutoA, selectedAudio Tracken (Main), selectedFullscreenThis is a modal window.Beginning of dialog window. Escape will cancel and close the window.TextColorWhiteBlackRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentBackgroundColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentTransparentWindowColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyTransparentSemi-TransparentOpaqueFont Size50%75%100%125%150%175%200%300%400%Text Edge StyleNoneRaisedDepressedUniformDropshadowFont FamilyProportional Sans-SerifMonospace Sans-SerifProportional SerifMonospace SerifCasualScriptSmall CapsReset restore all settings to the default valuesDoneClose Modal DialogEnd of dialog window.This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.Close Modal DialogThis is a modal window. This modal can be closed by pressing the Escape key or activating the close button.PlayMuteCurrent Time 0:00/Duration 0:00Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:00 Playback Rate1xFullscreenHow to bid at auction for your dream home? 01:45 The Gold Coast property market is tipped to be one of the nation’s top performing in 2019.THE Glitter Strip is in a good position to become one of the biggest stars of the Australian property market this year, a leading real estate expert says.Ray White Surfers Paradise chief executive Andrew Bell said the same fundamentals that drove the property market ahead of the Commonwealth Games would continue to boost growth over the next few years.“The Gold Coast has crystallised its position as Australia’s sixth largest city through an economic transformation that has been a long time coming,” Mr Bell said.He said $20 billion of infrastructure spending in recent years had put the Gold Coast in its strongest economic position yet.“All this development is not only making the Gold Coast stronger but it’s also providing significant employment opportunities now and for years to come,” he said. More from news02:37International architect Desmond Brooks selling luxury beach villa13 hours ago02:37Gold Coast property: Sovereign Islands mega mansion hits market with $16m price tag2 days agoRay White Surfers Paradise Group’s chief executive Andrew Bell at The Event last year. Pic Mike BatterhamDespite what some may suggest, Mr Bell said the Gold Coast wasn’t likely to follow in the footsteps of Sydney and Melbourne as its property prices increased at a much more sustainable rate than its southern counterparts.His comments come ahead of Ray White Surfers Paradise’s legendary annual auction, The Event.MORE NEWS: Mega mansion sale sets the bar
Are these Queensland’s most ‘Aussie’ homes? Labor says the changes will boost housing supply and jobs, but according to REIQ Townsville Zone Chairman Wayne Nicholson, no good will come from the policies, and instead they will create a supply and demand issue in Townsville’s property market.“We haven’t seen investors in Townsville’s residential real estate for almost eight years and that’s largely because the vacancy rate was through the roof … Then of course the floods hit, and the vacancy rate in Townsville now is around 1.5 per cent,” Mr Nicholson said.“So, just when we thought the investor might get interested again, we have these potential changes to negative gearing and the capital gains tax … We need investors buying residential property for people to rent, and they’re not going to do that if there’s a 50 per cent increase in capital gains tax, and a change to negative gearing.” Property prices are rising in these Townsville suburbs REIQ Townsville Zone Chairman Wayne Nicholson, and local investor Dave Lamari, have voiced their concerns about Labor’s negative gearing and capital gains tax policies. Picture: Shae Beplate.WITH the federal election on the horizon, the attention of property investors across the country has turned to Labor’s proposed changes to negative gearing and capital gains tax.The Labor Party has outlined its plan to limit negative gearing to new housing only from 1 January 2020, meaning investors will no longer be able to claim losses that arise from property investments to reduce their taxable income, unless it is an investment made prior to that date or a new dwelling.The opposition also plan to halve the capital gains tax deduction from 50 per cent to 25 per cent for all assets purchased after the same date. READ MORE: Flood victims back on their feet post-disaster REIQ Townsville Zone Chairman Wayne Nicholson, and local investor Dave Lamari, have voiced their concerns about Labor’s negative gearing and capital gains tax policies. Picture: Shae Beplate.“I’m an existing investor so any negative gearing benefits that I have within my property, I can continue to use, however when you change the rules so that existing property is not as appealing to an investor, it essentially changes the market of the existing buyers for my home,” Mr Lamari said. “The Labor Party do point out in their proposal that if you want to be an investor you still can because you can buy a new home … But the problem I have with that is it will essentially mean that the only place it will be viable to buy a home is in a new development, and that will create rental slums, where basically investment groups buy in one area and it’s all rentals.” “No astute investor should buy a property that’s surrounded by other rentals — that’s bad investing.” READ MORE IN REAL ESTATE NEWS Townsville houses damaged during the floods. Picture: Zak SimmondsA survey by the Property Council of Australia, revealed that the 33 per cent of potential investors said they would “probably or definitely” buy a newly-built investment property in the next five years under the existing tax arrangements. This number drops to 24 per cent under Labor’s proposed changes.More from news01:21Buyer demand explodes in Townsville’s 2019 flood-affected suburbs12 Sep 202001:21‘Giant surge’ in new home sales lifts Townsville property market10 Sep 2020“If you accept that real estate thrives on the supply and demand factor and nobody’s putting new rental properties in the pool — then it stands to reason, the rental prices are going to go through the roof and it will be the tenant who is paying for that policy.” Labor member for Herbert, Cathy O’Toole said the changes aren’t to help investors but are intended to help drive home ownership, particularly for new home buyers.“Labor’s changes will help first home buyers in Townsville get into the market and help the budget bottom line; this will mean that we can put more money into nation-building investments like schools, hospitals and infrastructure projects,” Ms O’Toole said.“This is about driving higher home ownership by levelling the playing field.”“First home buyers should have a fair go at buying a house, they should not have to compete with investors who are being subsidised to buy their sixth or seventh property.”The opposition has included grandfathering in both its policies meaning that all investments made prior to 1 January 2020 will not be affected by the changes to negative gearing or the capital gains tax. “If you already use negative gearing, nothing changes. It’s not retrospective. People can still use negative gearing for the purchase of new houses,” Ms O’Toole said.Townsville Investor and Principal at Huggable Home Loans Dave Lamari said Labor’s changes to negative gearing and capital gains tax will have an impact on his existing property, and he believes it will deter future investors — including himself.