Standard Life Investments (SLI), the Edinburgh-based real estate investment management platform of UK insurer Standard Life, is to reopen its £2.5 billion (€2.87 billion; $3.24 billion) UK Real Estate Fund next month.
The fund was closed at the beginning of July amid a sector-wide gating of open-ended retail vehicles after a run of redemptions by investors following the UK referendum on EU membership.
SLI had last week announced its intention to lift its suspension sometime before the end of the year, however today, the investment manager provided precise timing, stating the fund would, in fact, re-open for trading at midday on Monday, 17 October.
Now, all of the seven UK open-ended funds which closed trading after the vote have either lifted their suspensions or announced their plans to do so. Besides SLI, the other managers to close funds were Henderson Global Investors, Aviva Investors, Canada Life, Columbia Threadneedle and Aberdeen Asset Management. In aggregate, these seven funds contained approximately 60 percent of the UK commercial property held in such vehicles.
Their gating was considered an early indicator of issues for the property market following the referendum, accordingly, their controlled reopening and the relatively shallow discounts for assets sold to meet liquidity requirements has been a cause for relief in the sector.
In its announcement, SLI said: “We implemented a controlled and structured asset disposal programme in order to raise sufficient liquidity to meet future redemptions and work is ongoing to ensure the fund is well positioned for markets in the long-term. We now believe the commercial real estate market has stabilized and that the adequate level of liquidity achieved will allow the suspension to be lifted.”
David Paine, head of real estate at SLI, said: “In the immediate aftermath of the EU referendum result redemptions from retail investor property funds increased dramatically whilst property transactions reduced significantly. 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.”
Standard Life Investments has £18.7 billion of assets in direct real estate, public listed real estate and real estate debt. It operates with a team of 158 real estate investment professionals, based in five locations: Edinburgh, London, Paris, Boston and Hong Kong.