The Aegon Property Income and Property Income Feeder funds are set to close permanently, with asset manager unable to raise the required liquidity to meet redemption requests while keeping the vehicles viable after a 13-month suspension.
Aegon Asset Management, which suspended its property funds amid the onset of the coronavirus pandemic alongside most bricks-and-mortar peers, confirmed today (23 June) that in order to "ensure all investors are treated fairly" it is now taking steps to close the vehicles.
Earlier in June, Aegon Property Income fund had built up a cash level of 31.6%.
In order to ensure all investors are treated fairly, Aegon AM has decided to take steps to close the funds and return the proceeds to investors as quickly as possible, in a fair and orderly manner."
It had previously been hoped that the fund could reopen in the second quarter of 2021, however Aegon said it has "proved increasingly challenging to raise sufficient liquidity whilst also ensuring that continuing investors have a representative and well-balanced portfolio".
"Accordingly, in order to ensure all investors are treated fairly, Aegon AM has decided to take steps to close the funds and return the proceeds to investors as quickly as possible, in a fair and orderly manner," the firm said.
Aegon AM intends to make a series of payments throughout the closure period as sales are completed. Once the funds have closed investors will be advised when these distributions will commence.
Aegon's funds has been the last standing suspended vehicle in the IA UK Direct Property sector, following the reopening of the M&G Property Portfolio on 10 May and the 19 May decision to liquidate Aviva's UK property vehicle.
The firm highlighted the "extended period of stress" endured by daily-dealt property fund investors in recent years, and said that government-imposed lockdowns have "further challenged the sector".
Aegon said this has created "uncertainty about the long-term future of daily dealt property funds".
"Aegon AM will continue to raise liquidity and pursue the sale of all properties owned by the Aegon Property Income fund," it added. "Property sales can take time and must be done in an orderly manner to ensure fair prices are achieved for all its investors."
First published by our sister title Investment Week