UBS is to liquidate a $2bn (£1.5bn) real estate fund acquired when it bought Credit Suisse in spring 2023.
The office-focused fund had faced redemption requests but UBS said meeting those would require selling assets at an “inopportune time” so concluded it would be better to wind the fund down.
The Credit Suisse Real Estate Fund International’s total net assets were valued at just over $2bn at 30 June, said UBS, with values falling significantly last year. Annualised net returns for the fund over the past three years stood at -10.6%.
Some 83% of the fund’s investments are in offices, with it most geographically exposed to the US at 22%, followed by Germany at 16% and Canada at 14%.
UBS said 36% of the fund’s total units in circulation in 2022 had been redeemed by the end of 2023.
“The process to sell assets over the past 18 months to meet redemptions has demonstrated the limited depth of the real estate markets,” said UBS.
UBS added that to meet the outstanding 2023 redemptions would require the sale of the portfolio’s most liquid assets, but doing so would negatively impact remaining investors, decrease the attractiveness of the remaining portfolio and be likely to drive further redemptions.
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