LGIM makes 15% value cut to property fund

Added 7th July 2016

Legal & General Investment Management has become the latest asset manager to take steps to deal with the spike in redemption demands for UK property funds.

LGIM makes 15% value cut to property fund

Earlier today Aberdeen Asset Management and Canada Life announced measures following the likes of Standard Life Investments, Aviva Investors and Columbia Threadneedle over the past few days.  

Rather than halting trading as its peers have done LGIM has taken a different approach, making a 15% ‘fair value adjustment’ to L&G UK Property.

“At this time it is still difficult to predict the exact impact of the vote to leave and subsequent market events on commercial property values,” said a spokesperson. “In the interests of treating customers fairly, we have made a further fair value adjustment of -10%, so that the underlying property assets of the UK Property Fund and the UK Property Feeder Fund are now subject to a total fair value adjustment of -15%.” 

“The new prices were applied from the valuation point on 6 July,” she continued. “The adjustment has been made considering the broader market response and other economic metrics. We will continue to monitor market events closely, using all available sources and our experience of the property market.

The L&G UK Property Fund invests in over 100 UK commercial properties across retail, industrial and office sectors. The fund, was £2.3bn in size as at 30th June 2016, with no borrowings.

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Alex Sebastian

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Alex joined Portfolio Adviser in April 2014 and has been a financial journalist since 2008. He has previously held editorial positions at the Financial Times Group and Euromoney Institutional Investor. Alex is NCTJ qualified and has a degree in economics from the University of Sussex.



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