Standard Life Investments is to merge its two UK property funds as it completes a set of closures sparked by its 2014 acquisition of Ignis Asset Management.
In a letter to investors, the fund house said it plans to merge the £1.6bn SLI Ignis UK Property Fund with the £1.4bn SLI UK Property fund, having previously merged the two teams in October 2014. It will be renamed the SLI UK Real Estate Fund.
Both invest in physical UK commercial property assets and aim to produce a mixture of income and capital growth.
The merger is planned for May 2016, and will be preceded by adminstrative changes to the former Ignis fund - chief of which is SLI’s plan to shift the portfolio from dual pricing to single pricing, in line with its other funds.
SLI said this will happen on March 18. It will also change the Ignis fund’s custodian and launch new share classes. Costs will be borne by SLI, the fund group said.
In its letter to investors, the firm said: “We have concluded that a merger of the two funds would represent the best outcome for investors as both funds have very similar objectives, portfolio characteristics and follow similar investment approaches.”
The SLI Ignis UK Property fund has returned 27.4 per cent over the last three years, and the SLI UK Property fund 29.4 per cent. This compares to a IA Property sector return of 20.7 per cent.
The move will leave the SLI Ignis Absolute Return Government Bond fund as the sole portfolio bearing the Ignis name, following the merger of 11 other portfolios last October.
