The news comes a day after the firm announced it had adjusted the fair-value pricing on the Kames Property Income and Kames Property Income Feeder lower by a further 5%. And, ends a week of turmoil for UK property funds.
Yesterday’s adjustment follows a previous 5% adjustment on 28 June. This 10% total adjustment to direct property values equates to 8.51% of the value of the fund as at 7 July 2016.
Designed to help smooth out pricing during what the fund terms, counter-trend orders, the large deal provision applies to deals or a group of connected deals in the same dealing period of at least £15,000.
When the fund is being priced on a cancellation basis, as it is currently, as there are net outflows, the large deal provision allows the manager to charge a price higher than the published ‘cancellation’ price in order to help pay for the cost of buying new properties and to ensure that existing shareholders are not prejudiced.
According to Kames, the decision to temporarily suspend this LDR, which would increase the cost of a subscription by about 6.6% of the cancellation price is warranted because in the current environment, it is unlikely that the fund will be buying any properties in the immediate future.
“It is intended that the waiver will remain in place until we consider it appropriate to remove it in light of such factors as the funds’ allocation between direct property assets and cash returning to a normal level. We will provide notification of our intention to end the waiver,” the firm said,