abrdn is proposing a shift in its UK Real Estate fund towards a hybrid, global strategy, with a vote for shareholders on 18 September.
If approved, the fund will be renamed as the abrdn Real Estate fund, with its feeder fund as the abrdn Real Estate Feeder fund. The remodelled fund would allocate 45% of its portfolio to direct UK real estate and 45% to a global indirect real estate portfolio, including Reits, ETFs and listed property securities. The last 10% of the fund will be dedicated to money-market instruments.
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George Shaw, fund manager of the abrdn UK Real Estate fund, said: “It is clear from engagement with our investor base, that a significant number of share/unitholders want more certainty regarding daily dealing. The changes we propose to make to the structure and portfolio will help ensure that our clients continue to gain exposure to high-quality commercial real estate in their preferred daily dealing format.
“By adding an element of indirect real estate, we are also able to tap into our Global Real Estate Securities team’s highest conviction ideas in new markets and sectors thereby providing greater diversification benefits across a broader opportunity set than just the UK, which accounts for 4% of the global benchmark. I am positive about the future prospects for the funds, and I look forward to re-engaging with both existing and prospective investors on what is a very exciting time for the asset class given our latest HouseView forecasts.”
If approved, abrdn estimates the transition of the fund would take up to 18-24 months. The benchmark of the fund would also be changed to a combination of the MSCI UK Monthly Property index, FTSE EPRA Nareit Developed Net Total Return index and the SONIA, going into place on 2 October. It would also result in a fee restructure, with a reduction for retail investors of 0.15 percentage points for the AMC and OCF.
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Anne Breen, global head of real estate, abrdn, says: “The UK Real Estate fund is of strategic importance to abrdn and is a key product offering for wholesale investors in the UK.
“By making these changes to the strategy we are continuing to evolve and enhance our product range to ensure we offer a range of market leading real estate solutions to both existing and prospective investors. abrdn have a long track record of investing both directly and in listed real estate which we believe will underpin the success of this strategy.”
