The SLI UK Real Estate Fund was one of a number of UK property funds to suspend trading on or around 4 July after the Brexit vote spooked investors.
SLI said it took the suspension decision in order to protect the interests of investors in the fund following an ‘unprecedented level of redemptions’.
The insurance giant also put a “temporary” ban on customers withdrawing money from its onshore bonds if part of their investments were held in commercial property funds, though this did not affect offshore bonds.
The asset manager subsequently implemented ‘a controlled and structured asset disposal programme’ in order to raise sufficient liquidity to meet future redemptions, it said. It now believes the commercial real estate market has stabilised and that the adequate level of liquidity achieved will allow the suspension to be lifted.
Dealing instructions to purchase or redeem shares will be accepted from Wednesday, 28 September, in a written or faxed format only.
Liquidity restored
“In the immediate aftermath of the EU referendum result redemptions from retail investor property funds increased dramatically whilst property transactions reduced significantly,” said David Paine head of real estate at SLI.
“During the period of suspension the fund has been able to restore liquidity through an orderly disposal of assets. We are pleased with the progress made and the removal of the market value adjustment, and able to announce the reopening of the fund next month.
“The Standard Life Investments UK Real Estate Fund invests in a diverse mix of prime commercial property,” Paine added. “Its lower risk positioning should therefore be beneficial for performance at times of market stress and uncertainty and continues to offer a stable and secure income, with a distribution yield of 4.04%.”
