The fund’s directors notified the Channel Island Stock Exchange earlier today of its decision to suspend the fund, explaining that in recent weeks “continuing net redemptions…have exhausted the cash reserves more quickly than they can be replenished”.
Providing more detail, the announcement explained that in July of this year the fund had around 10% of its net asset value, which at the last available valuation at the end of August stood at £282m, “in cash or near cash”.
Active Fund Services added that “over the past two months this figure has fallen due to increasing redemptions”.
Offering some explanation as to why the fund has suffered such a high number of redemptions, the directors said: “…due to quite a sudden change in market sentiment caused by other funds in the sector, this has precipitated recent redemptions from the [fund’s] cells to be higher than normal and it has simply not been possible to maintain this level of cash without selling an asset quickly (or borrowing to pay shareholders that are trying to redeem).”
The “other funds” to which Active Fund Services refer it is safe to assume are the Brandeaux range of funds which were suspended in July.
Since suspending its funds, Brandeaux has been criticised by others within the student accommodation sector for stirring negative sentiment about the asset class.
One critic has been Coral Portfolio’s John Kennedy who challenged Brandeaux’s assertion that there is too much student accommodation available on the market.
