Aberdeen investors cancel property redemptions due to exit fees

Martin Gilbert Aberdeen

Aberdeen Asset Management says many trades submitted last week on its property fund have been withdrawn by investors following the application of new exit penalties.

Chief executive Martin Gilbert says the fund will extend its suspension on trading for two more days following requests from two platforms.

Last week the property fund announced it was increasing exit fees to 17 per cent as funds across the property sector face liquidity concerns in the aftermath of the UK’s vote to leave the European Union.

Trades submitted after midday 5 July would be affected.

Following today’s extension, investors will have until midday 13 July to cancel or amend any redemption requests. Those who do not request a cancellation will have their redemptions processed on Wednesday at the diluted dealing price.

“Following the application of the dilution adjustment the vast majority of trades submitted prior to temporary suspension last Wednesday have been reviewed and, in many cases, have been withdrawn by investors,” Gilbert says.

“Whilst we are in a good position to lift the suspension today, given the exceptional circumstances and specific requests we have received from two large platforms, we believe it is appropriate to allow a further two days for remaining investors to be contacted in the interests of treating all customers fairly.”

Gilbert offered thanks to distributors and intermediaries “who have worked tirelessly with us to ensure investors are aware of the actions we’ve taken and of the options they have”. 

More than half the £25bn property fund sector is now suspended with Columbia Threadneedle Investments and Henderson Global Investors last week suspending dealing in property funds worth £5.3bn.

They follow in the footsteps of M&G Investments, which temporarily suspended trading in its £4.4bn M&G Property Portfolio and its feeder fund, while SLI stopped trading on its £2.7bn UK Real Estate fund in response to redemption requests, and Aviva Investors suspending trading on its £1.9bn Property Trust.

This morning Kames announced it has waived dealing costs for new investors to encourage investment in the fund.

Aberdeen AM has one of the highest levels of liquidity compared to similar funds and had sold all quoted property investments in the week prior to the UK’s vote to leave the European Union.