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Press Release

For immediate release: Friday 23 November 2007

UK AUTHORISED PROPERTY FUNDS

Responding to recent press coverage on property funds, Richard Saunders, Chief Executive of the Investment Management Association (IMA) said:

"Our statistics show that while retail investment in the UK authorised property funds market has slowed down in recent months it remained positive over the summer. Next week we will be publishing figures for October, which will show a modest outflow of 1% of total assets of property funds. Redemptions at this level are well within the liquidity capacity of these funds and are perfectly manageable." 

- ENDS -

Notes to Editors:

1.  Total net sales of property funds  Total assets under management
July +£54mn £15.5 bn
August +£69mn £15.7bn
September +£62mn £15.6 bn
October -£159mn £15 bn

 

 

 

 

                                                                                                                                                    


2.  Institutional investors in property funds

  • Institutional investors in property funds investing directly in property may be subject to notice periods.
  • Where inflows exceed outflows managers may choose to waive this notice period.

3.  Retail investors and property funds

Of the IMA's 32 UK onshore property funds authorised for sale to retail investors just over half are directly invested in property.  These are non-UCITS funds and cannot be marketed across the EU. 
The remainder are invested in a mixture of property shares, cash and other assets and will not be affected by potential liquidity issues.  These can be either UCITS or non-UCITS funds. 

4.  Redemption rules for retail investors

  • A UCITS fund (which can be marketed across the EU) must offer investors the opportunity to redeem units at least twice a month but most do so on a daily basis.
  • A non-UCITS fund (which cannot be marketed across the EU) investing directly in property can operate on a limited redemption basis only if this is disclosed in the prospectus.  In any event, redemption must be offered at least once every 6 months.

For further information, please contact:
Noreen Shah, Communications Officer, IMA, 020 7831 0898

Out of hours contact:
Mona Patel, Head of Communications, IMA, 07834 089 332

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