Investment property portfolio management and financial derivatives: Paper 2 Available to Purchase

A previous paper (Vol. 16 No. 3) examined the potential contribution of derivative products to the mitigation of some of the problems and risks associated with direct property investment. This paper analyses the property‐related derivative products that have been developed. Particular attention is paid to the products developed by Barclay de Zoete Wedd ‐ property index certificates (PIC), property index forwards (PIF) and property index notes (PIN) ‐ and property basket warrants issued by Goldman Sachs and SBC Warburg. It is argued that institutional attitudes to derivatives are key to their success. Previous research on this issue is reviewed. It is concluded that the development of PICs has “broken the ice” with investors and should generate increased interest in and use of derivative products in the property sector by UK and overseas institutional investors.