EU ‘leave’ vote impacts Aegon property funds

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Uncertainty in commercial property markets following the UK’s decision to leave the European Union has impacted property valuations and has led to a rise in the level of withdrawals from some property funds.

As a result, a number of property funds offered by Aegon have deferred payments, instigated dilution levies, or made fair value price adjustments with the aim of protecting investors.

Read our Q&A to find out what this means for property investors.

  • Aberdeen UK Property
  • Aegon international Property (series A and B)
  • Aegon international Select Distribution (series A and B)
  • Aegon international Select Reserve (series A and B)
  • Aegon Property Select Portfolio
  • Aviva Investors Property Trust
  • Henderson UK Property
  • M&G Property Portfolio
  • SLI UK Real Estate
  • Threadneedle UK Property 

Aberdeen Fund Managers has applied a dilution levy to its fund, so that investors can continue to access their savings, but at a reduced price. This means that today’s dealing price has been reduced by 16%.

Fair value price reductions have also been applied to several property funds.

Find out more.

Aegon’s £700 million Property fund has applied a fair value reduction, but has not been suspended and currently has a healthy liquidity position of over 27% following prudent actions taken prior to the EU referendum. 

Find out more.

Where an affected fund is used in a model portfolio the allocation to that fund will be removed and will become a non-realisable asset held outside of the model.

The asset allocation of the model portfolio will be updated, with the allocation to the affected property fund reassigned to cash. This means that investments into the fund can continue as normal, but the allocation that would have gone to property will be invested into cash, unless you update your model.

Where a model portfolio is rebalanced, that rebalance will apply to all investments in the wrapper, except the non-realisable property asset.

When the affected property fund resumes trading, the frozen assets remain outside the model, but can be accessed again and will be affected by any rebalancing activity. The reopened fund will also become available for you to add back into model portfolios if you wish. Rebalancing activity once the fund has reopened will result in affected property assets being sold to achieve the desired asset allocation, unless the fund is added back into the model. We won’t automatically add affected funds back in.

We recommend that advisers and discretionary fund managers review their model portfolios in the light of these changes.

You may wish to review your property investments. Where a fund is in deferment, we will contact affected investors to explain what the changes mean for them.

We’re closely monitoring property funds with our fund managers. We’ll update our website here should there be further changes to our funds.

If you’re uncertain about how this affects your investments, please speak to your financial adviser in the first instance. If you don’t have a financial adviser you can find one in your area at unbiased(Opens new window)(Opens new window)(Opens new window)(Opens new window).

You can also contact us, but please remember we won't be able to give you any financial advice.