After being blocked for more than a year to stem a wave of investor redemptions that at one stage threatened to capsize the fund, New Star’s international property fund will re-open for business in February.
The fund, now run by Henderson Global Investors, which acquired New Star’s investment platform last year, was marketed at “retail” investors – the general investing public - is one of the last property funds to re-open following a spate of closures prompted by liquidity problems.
The decision follows a programme of asset disposals that has helped to restore the level of cash in the fund, which will be used to pay investors who wish to leave.
However, investors whose holding is worth more than £7.5m face either a one month’s written notice or a charge of 10 per cent of the value of the redemption, which should allow the fund manager greater control over liquidity.
It should also help protect the retail investors in the fund from further closures owing to large movements of capital by institutional holders.
There has been a swing in investor sentiment over the past six months and the queue of redemptions from the fund is expected to have reduced as investors changed their opinion about the prospects of an international real estate market recovery.
The UK retail property funds have seen a turn in fortunes in the past six months and are now taking in far more money than they are paying out. Certain funds have even begun to limit new investments to prevent a flood of cash that will drag on returns.
The New Star international property fund now has a value of £290 million, less than half the £700 million when it closed in November 2008, which reflects the fall in value of international property as well as the sale made during the period.
LINKS:
http://www.everyinvestor.co.uk/investing/funds/property-funds-good-bet-for-2010
http://www.everyinvestor.co.uk/investing/funds/investors-pile-into-property-funds--standfirst--pr
