Abrdn is merging its two open-ended property funds, the Aberdeen UK Property fund and the Standard Life Investments UK Real Estate fund, along with their feeder funds.
The group has two property authorised investment funds (Paifs), together with their respective feeder funds, following the merger of Standard Life with Aberdeen Asset Management in 2017.
In a note to clients, seen by Portfolio Adviser, the group said merging the funds, both managed by George Shaw (pictured), would represent the best outcome for investors as both have very similar investment objectives, key product features and fund strategies.
“The amalgamation of the two Paifs will provide investors with a larger fund with greater diversity of both assets and investor base. This is expected to result in long term improved performance for all investors,” the note said.
The measures were approved at an EGM on 8 October and the merger was finalised after more than 75% of the Aberdeen fund shareholders agreed to the proposal on Friday.
The two funds will merge on 26 November at which point shareholders in the Aberdeen Paif will exchange their shares for shares in the SLI UK Real Estate fund.
Trading in the SLI feeder fund, SLI Paif, Aberdeen Paif and Aberdeen feeder fund will be temporarily suspended around the merger date to reduce operational risk. The last day to deal in all funds will be 12 noon on Thursday 25 November and trading will reopen on Monday 29 November.
The two funds were among a raft of open-ended property vehicles frozen in March 2020 when the independent valuers were unable to price underlying properties because of coronavirus-related market volatility. The two Abrdn funds reopened to trading on 16 November last year after shoring up enough liquidity.
According to Morningstar data, both funds have been losing money every month for the past year, except for a positive net inflow of £18.9m into the SLI UK Real Estate fund in October last year.
At the end of August, the Aberdeen UK Property fund had £464m in AUM down from £976m in September 2020. The SLI UK Real Estate fund had assets of £1.1bn, down from £1.6bn in September 2020.
