Kames Capital has temporarily waived its large deal provision on its two property funds to entice new investors.
The waiver came into effect at midday.
Kames said: “We have taken this decision in view of the exceptional market circumstances affecting the UK commercial property market following the outcome of the EU Referendum.
“In this environment, we do not expect that the funds will acquire direct property assets in the immediate future, and so we consider this action to be in the interests both of existing and prospective investors.”
Yesterday: Three more property funds adjust prices to stave off redemptions
Today: Retail funds review urged
Analysis: What’s going wrong with open-ended retail funds?
It said: “It is intended that the waiver will remain in place until we consider it appropriate to remove it in light of such factors as the funds’ allocation between direct property assets and cash returning to a normal level. We will provide notification of our intention to end the waiver.”
The funds are priced on a cancellation basis with the LDP normally being applied to subscriptions to mitigate the impact on existing investors of the transaction costs associated with buying properties within the fund.
Kames said the LDP effectively increased the cost of a subscription by about 6.6% of the cancellation price.
Earlier today the FCA issued a statementabout the responsibilities managers have to their investors.
The statement reminded fund managers that if assets had to be sold to meet redemption requests, they “must ensure these disposals are carried out in a way that does not disadvantage investors who remain in the fund or are newly investing in it.”
It went on to say that trading should stop only in “exceptional circumstances” and after contacting the FCA.
Once the fund lifts its suspension, managers should tell their investors what their options are, how to cancel redemption requests and what the new redemption price is.
The group also said investors have to be given “sufficient time to make their decision and to seek appropriate advice”.
Fund managers, the FCA said, have a “duty to act in the best interests of all investors”, warning that if assets are not valued fairly, some investors will benefit at the expense of other investors in the same fund.
