SJP and Columbia Threadneedle rush to reopen real estate funds as rivals hold back

Columbia Threadneedle has joined St James’s Place and reopened its frozen real estate fund following a stamp of approval on the valuation of its assets but rivals funds remain cautious.

SJP and Columbia Threadneedle were among the raft asset managers who suspended their real estate mandates in March after the economic fallout from the coronavirus made it impossible for appraisers at accurately assess real estate assets.

Near £ 22 billion investor money has been trapped in the frozen funds, which included the SJP £ 1.3 billion Real estate investment funds, £ 1.1bn in life insurance funds and £ 1.2bn in real estate pension funds, as well as the £ 1 billion Threadneedle Paif.

Corn before noon on Wednesday SJP announced its £ 3.6bn real estate funds will resume operations after its independent assessor CBRE has lifted the material uncertainty clause who triggered the suspension. “The removal of this clause means that they are now able to confidently assess the properties held in the funds,” said a spokesperson for SJP.

Hours later, Columbia Threadneedle followed suit, confirming that the Threadneedle Paif would reopen on September 17th.

Director Gerry Frewin said that while Covid made short-term property returns negative in the first half of 2020, capital volatility has eased and the long-term case for real estate remains compelling.

“We are aware that suspending transactions in the fund may have caused inconvenience to our clients, but the decision to suspend transactions meant that no unitholder would be at a disadvantage and ensured the fair treatment of all investors at a time. of exceptional uncertainty in the market, ”Frewin mentioned.

CBRE position change follows a recommendation from the Royal Institution of Chartered Surveyors (RICS) a general removal of material valuation uncertainty on all UK property excluding certain strengths in the leisure and hotel sectors.

SJP and Columbia Threadneedle are only the second and third providers to unlock their real estate funds. In June BMO Global asset management lifted the suspension of its Property Growth & Income portfolio. The £ 490.4million fund, managed by Marcus Phayre-Mudge and George Gay, were much less exposed to physical real estate in the UK than some of their peers with 28.8% held in this asset class.

Janus Henderson and Aegon funds remain frozen despite CBRE verdict

Despite experts give the green light to real estate funds Most are take a wait and see approach. Janus Henderson and Aegon Asset Management, who also use CBRE as their independent appraiser, Recount Portfolio advisor they would remain closed for the time being.

A spokesperson for Janus Henderson said the the board of directors of the fund had decided that the Henderson UK Paif and its feeder fund should remain closed to give it time to raise additional cash to respond redemption requests known on reopening and reduce the risk of short-term resuspension.

The Aegon Property Income fund, formerly known as the Kames Property Income fund, is expected to go through its next valuation point in late September before a decision to unfreeze the fund can be made, a company spokesperson said.

The MUC is also just one of many factors that must be considered before a suspension can be lifted. including liquidity, reduced trading volumes in the market (a valuation is not good for a fund to cope with a redemption) and there are still no pending trades ”, they added.

Other real estate giants intervene

Aberdeen Standard Investments, which uses independent expert Knight Frank, also said it is unlikely to reopen its £ 983.6 million real estate fund before thiss next valuation on September 30.

“Although the clauses have now been removed, the most recent valuation of the fund was ‘uncertain’ at the time and will need to be reconsidered in the ordinary course before any fund operations can possibly resume,” said a holder. word.D.

In an update posted to its website on Wednesday, Royal London said the current restrictions on its RL Property fund to stay. But he added that he expects his independent appraiser Cushman and Wakefield to remove the uncertainty clause affecting his £ 390.7million. RL Real estate fund by the end of the month.

The M&G real estate portfolio also remains closed, according to an update posted on its website Tuesday, despite the fund’s independent appraiser, Knight Frank, lifting material uncertainty clauses from all sectors, at the except retail, entertainment and hospitality.

M&G said that as of August 28, 54% of the fund’s net asset value (£ 1.1bn) was no longer subject to material uncertainty, rising to 64.7% (£ 1.4bn) ) if cash, Reits and indirect participations are taken into account.

The current fund size is £ 2.1bn with a cash position of 8.2% and £ 129.9m in assets in the hands of lawyers for sale.