Changes to Henderson UK Property Trust

Henderson Global Investors has made a couple of changes to its Elite Rated UK Property Investment Trust.

Change of structure

Firstly, Henderson has converted it to a ‘Property Authorised Investment Fund’ (PAIF), which is a type of tax-efficient structure that benefits UK tax-exempt investors. If you are an investor, you do not need to do anything. The investment process, fund manager and underlying holdings in the fund all remain the same.

Change of pricing

Secondly, Henderson have moved the fund from offer to bid pricing due to a large number of outflows from the sector as a whole. This means that if an investor now wants to redeem their holdings, they will effectively be charged 4.6% for doing so. However, the change to bid price does mean a lower entry price for new investors in the fund.

Henderson said in a statement: “It is important to note that the pricing basis decision for a dual-priced UK commercial property fund is not related to the liquidity position of the fund. “It is about being fair both to transacting clients and to clients who remain invested in the fund.”

The company said the portfolio, run by Ainslie McLennan and Marcus Langlands Pearse, has “significant diversity” in terms of both its investor base and its property holdings, as well as “material” allocations to cash and property equity assets.

Darius McDermott, managing director of FundCalibre, commented: “We expect the fund to remain on bid pricing for the medium term. It is important to remember that existing investors will only face this charge if they chose to redeem their holdings. Long-term investors are likely to see the price move back to ‘offer’ before they sell their holdings.

“The fund is a strong performer and commercial property provides diversification in a balanced portfolio. The fund will remain Elite Rated.

The views of the author and any people interviewed are their own and do not constitute financial advice. However the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Before you make any investment decision make sure you’re comfortable and fully understand the risks. If you invest in fund or trust make sure you know what specific risks they’re exposed to. Past performance is not a reliable guide to future returns. Remember all investments can fall in value as well as rise, so you could make a loss.