Aviva Investors has liquidated around 45% of assets within its shuttered property fund and will hand investors at least £167m in an interim return of cash.
The company announced it was shutting down the £367m UK Property fund and its feeder funds in May, 14 months after it suspended dealing as property markets ceased trading in the pandemic.
At the time it warned investors may have to wait up to two years to get their money back.
It was not immediately clear how much cash was outstanding in the feeder funds. A spokesperson for Aviva had not responded to a request for comment by publication.
According to a letter, 45.6% of the assets have now been offloaded. Investors in the Acc 1 share class will receive 82.3p per unit, those in the Acc 2 share class will get 83.27p, while clients in the Inc 2 share class will get 77.43p.
‘All proceeds have been added to your client’s wrapper’s cash facility and will remain there unless you or your client give us a clear instruction to invest into an alternative fund or funds,’ the letter, signed by head of platform operations Graham Macleod, said.
‘We will let you know when we receive confirmation from Aviva regarding further capital distributions.’
In a value for money review, the company had earlier said it had become ‘increasingly challenging to generate positive returns’ from the asset class, while also maintaining the ‘necessary liquidity to reopen the funds’.
‘This review, combined with forecast redemption levels upon reopening, concluded that the funds’ ability to fully benefit from the economies of scale and the diversification of investments that collective investment schemes normally bring would soon be limited,’ the firm said.
‘Size is particularly important for funds that invest in property directly because the costs involved in acquiring, managing and disposing of properties are usually much higher than the costs associated with other asset types.’
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