Aberdeen dilution levy eased to 7% as redemptions slow

Martin Gilbert AberdeenAberdeen Asset Management has reduced its property funds’ dilution as post-Brexit redemptions begin to slow, resulting in a 7.5 per cent increase in the dealing price.

The current dilution levy has been reduced from 17 per cent of 7 per cent on both the UK Property fund and the UK Property Feeder Unit trust continues to be applied to the underlying property portfolio.

Aberdeen says the reduction in the dilution adjustment applied is “a reflection of the reduced volume of redemptions experienced over the past week” as well as a result of rebuilding the cash levels in the funds following the selling of a select number of property in the portfolio.

However, the group says if redemptions increase and cash levels are again depleted the dilution adjustment may rise further.

Aberdeen Asset Management chief executive Martin Gilbert says: “I am pleased that we have been able to reduce the temporary dilution adjustment applied to the funds significantly, reflecting the reduced levels of redemptions the funds have seen and the rebuilding of the funds’ cash levels.

“In all of this, our focus has been to treat all customers fairly by providing liquidity to those who wish to redeem whilst protecting the interests of long-term investors.

“Our hope is that trading in the funds continues to revert to more normal levels. This should allow us, in time, to remove the dilution adjustment altogether.

“The post-referendum environment now seems to be settling down with thoughts of reducing property holdings being balanced by the fundamental long-term attractions of the asset class.”