Lothbury Investment Management has confirmed that it is to liquidate its UK balanced open-ended property fund, Lothbury Property Trust.
The investment manager said it had decided to close the £850m trust because of “the shifting investment needs of its primary investors, namely corporate UK defined-benefit pension schemes”.
Following a significant rise in interest rates over 2022 and 2023, many of the fund’s investors have achieved fully funded status, substantially reducing their requirement for property as part of their investment portfolios, said Lothbury.
“The decision to terminate the fund was not taken lightly and only after due consideration of several other options. However, on balance, it was believed that it presents the most equitable solution for all of our investors and allows us to distribute the proceeds in an orderly and efficient manner,” said Adam Smith, chief executive of Lothbury Investment Management.
“We remain committed to our investors and will continue to manage the wind-down process with the utmost care in order to get best price whilst providing full transparency. We are incredibly proud of the fund’s performance over the last 24 years, outperforming the benchmark in 70% of the years prior to the pandemic. This track record is a testament to our dedicated team and our disciplined investment strategy.”
As at 30 April this year, the trust had a net asset value of £848m. According to its website, assets in the trust include the 226,547 sq ft Clarendon shopping centre in Oxford city centre, valued at around £50m, the 418-bed Sheraton Park student accommodation scheme in Durham, valued at £39m, the Meteor Park industrial unit in Birmingham, valued at £37m and the 150-bedroom Malmaison hotel in York, which is valued at around £31m.
The trust has been gated for some time and in March sold a portfolio of its freehold assets in Covent Garden, WC2, to Shaftesbury Capital for £75.1m.
Lothbury Investment Management said it would continue to expand its work on a growing number of mandates from Nomura Real Estate and other clients, despite the liquidation of the trust.
Send feedback to Samantha McClary
Follow Estates Gazette
