Henderson Global Investors has reduced the fair value adjustment on its suspended UK Property PAIF and feeder fund from 5 per cent to 3.5 per cent.
In a note on the firm’s website, Henderson says the £3.5bn fund, which was suspended on 5 July due to “extraordinary” redemption requests post Brexit, will stay suspended and receive “a further” review within the next 28 days. Assets in the fund dropped £400m from £3.9bn at the end of May to £3.5bn a month later.
The note says: “While good progress is being made in rebuilding liquidity in the fund, the fund is not yet at a stage where it can reopen to daily dealing.”
As of 31 July, liquid assets in the fund were 11.2 per cent, with 10.4 per cent being in cash. It has created a 0.8 per cent position in REITs, having previously held no REITs ahead of the EU referendum.
However, the group says: “This is not yet sufficient to accommodate intended client redemptions and be comfortable avoiding a fresh dealing suspension soon after re-opening.”
The group aims to have 15 to 20 per cent cash in the fund in periods of net redemptions, and had 14.3 per cent at the end of May in the run-up to the EU referendum.
Since the referendum the fund has sold a number of properties, including a hotel in London, a retail store, a Kensington office and two London pubs. It is in the process of selling other properties.
The news comes as last week Henderson reported £2bn outflows in its trading statement for the first six months of the year. The firm said outflows “accelerated considerably” in the aftermath of the UK’s vote to leave the EU.