Property fund suspensions – frequently asked questions

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What’s happened?

On 18 March 2020, we suspended trading for several property funds across the following fund ranges:

  • Pension
  • Life
  • Aegon TargetPlan
  • Aegon One Retirement (AOR)
  • Aegon Retirement Choices (ARC)
  • Aegon Platform fund ranges

This means investors are currently unable to invest in, switch out or withdraw money from these funds until such time as the fund manager resumes trading.

Why did this happen?

The current coronavirus pandemic has led to increased levels of volatility in financial markets. When this happens, it can make it difficult for markets to function normally.

This is currently the case for funds that invest in physical UK commercial properties.

The scale of volatility has impacted on the ability of independent property valuers to accurately assess the value of physical properties. We’ve been informed that the UK valuer community has invoked the ‘Uncertain Market Valuation Clause’ – which means, at present, they don’t believe they can provide accurate valuations on UK commercial properties in current market conditions.

As a result, trading has been suspended for several of our impacted property funds until there is greater clarity over UK commercial property values.

What funds have been suspended?

The impacted funds (as at 12pm on 23 March 2020) and the fund range they appear on are listed below:

Insured funds

Pension

  • Property fund
  • Property Select Portfolio
  • Scottish Equitable Threadneedle UK Property Trust fund
  • Scottish Equitable Legal & General UK Property fund

Life & bonds

  • Property fund

Aegon TargetPlan

  • Aegon Property (BLK)
  • Aegon Threadneedle Pensions Property (BLK)

ARC

  • Property (ARC) fund
  • Property Select Portfolio (ARC)
  • Scottish Equitable Threadneedle UK Property fund (ARC)
  • Scottish Equitable Legal & General UK Property fund (ARC)

AOR

  • Aegon Janus Henderson UK Property fund (AOR)
  • Aegon Kames Property Income (AOR)  

Unit Trusts and OEICs

ARC

  • ARC TIME Commercial Long Income Feeder Trust
  • ARC TIME Social Long Income Feeder Trust
  • ASI Global Real Estate Fund
  • Aviva Investors UK Property Fund
  • Aviva Investors UK Property Feeder Acc
  • Aviva Investors UK Property Feeder Inc
  • Aberdeen UK Property Fund
  • Aberdeen UK Property Feeder Unit Trust
  • ASI Life UK Property Fund  BMO UK Property Fund
  • BMO UK Property Fund
  • BMO Property Growth & Income 
  • Janus Henderson UK Property PAIF
  • Freehold Income Authorised Feeder Trust
  • Kames Property Income Fund
  • Kames Property Inc Feeder
  • L&G UK Property Fund (PAIF/OEIC)
  • L&G UK Property Feeder (Unit Trust)   
  • M&G Property Fund
  • M&G Feeder of Property Fund
  • MGTS St Johns High Income Property fund
  • MGTS St John Property Authorised Trust
  • Standard Life Investments UK Real Estate Fund
  • Standard Life Investments UK Real Estate Accumulation Feeder
  • Standard Life Investments UK Real Estate Income Feeder
  • Threadneedle UK Property Authorised Investment Fund (Threadneedle PAIF)
  • Threadneedle UK Property Authorised Trust (Feeder Fund) 
  • TM Home Investor Feeder fund

Aegon Platform

  • ARC TIME Commercial Long Income Feeder Trust
  • ARC TIME Social Long Income Feeder Trust
  • ASI Global Real Estate Fund
  • Aviva Investors UK Property Fund
  • Aviva Investors UK Property Feeder Acc
  • Aviva Investors UK Property Feeder Inc
  • Aberdeen UK Property Fund
  • Aberdeen UK Property Feeder Unit Trust
  • ASI Life UK Property Fund  BMO UK Property Fund
  • BMO UK Property Fund
  • BMO Property Growth & Income
  • Janus Henderson UK Property PAIF
  • Freehold Income Authorised Feeder Trust
  • Kames Property Income Fund
  • Kames Property Inc Feeder
  • L&G UK Property Fund (PAIF/OEIC)
  • L&G UK Property Feeder (Unit Trust)   
  • M&G Property Fund
  • M&G Feeder of Property Fund
  • MGTS St Johns High Income Property fund
  • MGTS St John Property Authorised Trust
  • Standard Life Investments UK Real Estate Fund
  • Standard Life Investments UK Real Estate Accumulation Feeder
  • Standard Life Investments UK Real Estate Income Feeder
  • Threadneedle UK Property Authorised Investment Fund (Threadneedle PAIF)
  • Threadneedle UK Property Authorised Trust (Feeder Fund)
  • TM Home Investor Feeder fund 
  • VT Redlands Property Portfolio

What does this mean for investors?

This means investors are currently unable to invest in, switch out or withdraw money from these funds until such time as the fund manager resumes trading.

What happens to regular payments?

Regular payments into impacted funds can continue however they will not be invested directly into the fund but instead applied to either:

  • the Cash fund (for pension and life investors)
  • the Cash fund available to your scheme (for Aegon TargetPlan investors)
  • the individual cash facility (for investors on ARC and the Aegon Platform)

Investors on ARC or the Aegon Platform can gain access to any payments redirected to their individual cash facility as a result of this suspension.

What happens to regular withdrawals?

For pension and life investors

Investors will not be able to access their holdings in the impacted fund or funds until they resume payments out.

We’ll defer redemptions (payments out) from the fund for up to 12 months from the date of an investor’s instruction depending on the type of plan they’re invested in.

Deferred redemptions relate to delaying payments from the fund, which means investors will not be able to cash in their investment during this period. If they have confirmed that they wish the transaction to proceed we will process it at the end of the deferral period.

For Aegon TargetPlan investors

It won’t be possible for investors to switch out of or take benefits from the portion of their Account that is invested in the suspended fund or funds.

For ARC and Aegon Platform investors

If investors are currently taking regular withdrawals from their account, only hold impacted funds and there is no cash in the cash facility to cover withdrawals from the impacted funds, these withdrawals will have to stop until the fund suspension is lifted.

Where you are taking regular withdrawals and there are other funds in your account, we will continue to sell down the largest fund to meet these withdrawals unless other sell down methods have been set up.

What happens if I hold these funds in a model portfolio?

If investors hold any of the funds as part of a model portfolio and the portfolio experiences a rebalance, the impacted fund will be excluded and the remaining funds will be rebalanced proportionally.

Regular and single payments into model portfolios can continue, however any amount which would otherwise have been invested into the impacted fund will be moved into the investor’s individual cash account facility, where it will remain until they give us a clear instruction to switch into an alternative investment, if they wish to do so.

What happens to dividend income?

If investors are currently receiving income from their product in the form of dividends, these will continue as normal if the impacted fund pays any while suspended.

Why was no warning given?

We don’t give advance notice of any changes that could lead to some investors getting an unfair advantage over other investors by taking their savings out shortly before the fair value reduction was applied.

What current investors need to do?

If you’re uncertain about how this affects your investments, please speak to a financial adviser in the first instance. If you don’t have a financial adviser you can find one in your area via www.moneyadviceservice.org.uk

Please be aware that we do not offer investment advice.