Kames shifts £384m Property Income fund pricing to offer basis

Kames shifts £384m Property Income fund pricing to offer basis
Aidan Crawley/Bloomberg

Kames has made the final step in restoring parity in its £384m Property Income fund by moving its pricing back to the default ‘offer’ level.

Property funds can switch between offer and bid pricing with the latter charging redeeming investors a percentage fee to match the cost of selling properties in order to protect remaining investors.

Kames implemented the bid pricing level on June 24, the day after the UK’s EU-membership referendum, when the fund began experiencing net outflows. The shift removes a 6.6 per cent charge on the fund.

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The move marks a return to normalility for the Kames fund, which also implemented a 10 per cent fair value adjustment for redeeming investors, but lifted this at the end of September.

Recent inflows into the fund have been positive enough for the firm to shift back to default pricing. As one of many affected open-ended property funds, Kames saw net outflows in the aftermath of the Brexit vote. It started June with £515m of assets but saw this dwindle to £369m by the end of July.

Kames said: “Kames has moved the pricing basis of the Kames Property Income Fund from a ‘cancellation basis’ [bid] to a ‘creation basis’ [offer].”

However, other open-ended property fund providers are yet to return their vehicles to full normality with the exception of Legal & General Investment Management, which removed its final price adjustment in early September.

While the Standard Life Investments, Threadneedle and Henderson property funds have re-opened after gating in the immediate aftermath of the vote, all three still operate on a bid basis and the latter two have fair value adjustments. The M&G and Aviva Investors funds remain suspended.