Property Fund - Suspended

magpiecottage

I remember this. A lot of financial institutions bought out estate agents in the late 1980s for an average of about a third of a million per branch.

Ten years later they sold them, often back to the original owners, for about a tenth of what it had cost them. Whether you like it or not, that seems to be pretty shrewd business sense by the estate agents.

As for the financial institutions. Well it enabled them to sell endowments and get people to come out of occupational pension schemes to take pension mortgages.

That all ended well, didn't it!

bottleandahalf

Disgusting behaviour from asset 'management' companies.
Aberdeen slicing 17%!!!!! off their fund and L & G slicing 10-15%, even though this has a 5% spread when buying.

How can they get away with this?

dunstonh

bottleandahalf wrote: »

Disgusting behaviour from asset 'management' companies.
Aberdeen slicing 17%!!!!! off their fund and L & G slicing 10-15%, even though this has a 5% spread when buying.

How can they get away with this?

How is that disgusting? They are doing what they always do in periods of low liquidity. This is how they work and it is really difficult to see how else a fund with that structure could do it.

if they dont have the cash to pay a withdrawal, how do you propose they pay those withdrawals?

gadgetmind

Because it's a more accurate value than one based on valuations of their property done way back in the past. See valuations and discounts on REITs for what investors feel the value of commercial property actually is.

bottleandahalf

dunstonh wrote: »

How is that disgusting? They are doing what they always do in periods of low liquidity. This is how they work and it is really difficult to see how else a fund with that structure could do it.

if they dont have the cash to pay a withdrawal, how do you propose they pay those withdrawals?

Because they are getting paid to 'manage' these funds. If they think there will be a risk of withdrawals, should these fund managers not have earned their corn and sold some of the investments long before the vote?

L and G was holding 20% cash before the vote, in case of a Brexit vote. Along with a 5% spread. Ridiculous in my opinion.

gadgetmind

Who would they have sold their investments to? They do own a fair bit of property, and someone would have had to buy it. And what afterwards? Buy it all back?

AnotherJoe

bottleandahalf wrote: »

Because they are getting paid to 'manage' these funds. If they think there will be a risk of withdrawals, should these fund managers not have earned their corn and sold some of the investments long before the vote?

L and G was holding 20% cash before the vote, in case of a Brexit vote. Along with a 5% spread. Ridiculous in my opinion.

Whats ridiculous ? That they held 20% cash? Isn't that what you just said funds should do to buffer against unusual withdrawals?

Anyway had the vote gone the other way then some clevercloggs like you would have come along and said how disgusting it was that they had sold a load of properties just before they rose in value by 10% due to a Remain vote. So they are dammed if they do dammed if they dont.

Why dont you say how disgusting it is that people are behaving like a bunch of lemmings. At least that leaves a nice opportunity for anyone with a medium to long term investment horizon to get in at a low price.

bottleandahalf

AnotherJoe wrote: »

Whats ridiculous ? That they held 20% cash? Isn't that what you just said funds should do to buffer against unusual withdrawals?

Anyway had the vote gone the other way then some clevercloggs like you would have come along and said how disgusting it was that they had sold a load of properties just before they rose in value by 10% due to a Remain vote. So they are dammed if they do dammed if they dont.

Why dont you say how disgusting it is that people are behaving like a bunch of lemmings. At least that leaves a nice opportunity for anyone with a medium to long term investment horizon to get in at a low price.

No. Ridiculous that they feel the need to slice off a further 15%, even after holding a 20% 'buffer' and having a 5% spread to begin with. Ridiculous (in my opinion).

And how do you know the properties would have risen 10% in the event of a leave vote, or that people are indeed 'disgustingly' acting like lemmings?

Is it really a nice opportunity to get in at a low price? Or will they slice another 10% off when they find another convenient excuse?

gadgetmind

If you want in at a low price, find a REIT with sensible gearing, not too much London exposure, more warehouse/distribution than office/retail, management with experience and "skin in the game", and a discount that makes your nose bleed.

dunstonh

No. Ridiculous that they feel the need to slice off a further 15%, even after holding a 20% 'buffer' and having a 5% spread to begin with. Ridiculous (in my opinion).

They have taken multiple actions to reduce the outflows. The outflows are significant and 20% would seen very nothing if it continues. So, nipping it in the bud by penalising short term traders and protecting long term investors is the common sense thing to do.

Is it really a nice opportunity to get in at a low price? Or will they slice another 10% off when they find another convenient excuse?

It could go on for years. Seeing as you dont really understand the investment class, its probably isnt a good opportunity for you.