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Aberdeen to convert £3.5bn Property Trust into Paif

Aberdeen to convert £3.5bn Property Trust into Paif

Aberdeen is to convert its Property Trust into a Paif structure as real estate funds continue to take advantage of more favourable tax arrangements.

The £3.5bn fund, managed by Gerry Ferguson, James McLean and Tim Sankey, will convert on March 4 subject to investor approval.

The move from a unit trust to Paif structure will involve a ‘feeder fund’ for investors not able or unwilling to invest directly in the latter, and thus will also include a new fee structure.

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The commercial property fund is moving from a fluctuating fee to a fixed rate for adminstrative costs and other expenses, with the maximum for both the Paif and feeder fund set at 20 basis points.

Aberdeen said Paif structures were more tax-efficient and exempt from tax on income from property.

“We believe the proposal is in the overall long best interest of existing unitholders as the Paif structure is generally a tax efficient one for eligible investors,” the firm said.

The investment objective will not change and all costs will be borne by Aberdeen.

The Aberdeen Property Trust returned 33.6 per cent over three years compared to 20 per cent for the Investment Association Property sector, according to FE Analytics.