Aberdeen Standard Investments  

Aberdeen Standard Investments merges property funds

Aberdeen Standard Investments merges property funds

Aberdeen Standard Investments (ASI) is to merge its open-ended Aberdeen UK Property and Standard Life Investments UK Real Estate funds, and their feeder funds, after gaining shareholder approval.

The consolidation of the two property authorised investment funds (Paifs) follows the merger of Standard Life with Aberdeen Asset Management in 2017.

Writing to fund investors in September, Aron Mitchell, director at Aberdeen Standard Fund Managers, said the folding of the fund into the SLI fund would represent the “best outcome for investors”.

“The Aberdeen Paif and the SLI Paif (and their associated feeder funds) have very similar investment objectives, key product features and fund strategies,” he said.

“The amalgamation of the funds will provide investors with a larger fund with greater diversity of both assets and investor base. This is expected to result in long term improved performance for all investors.”

Unit holders in the Aberdeen feeder fund approved the resolution on October 8 and last Friday (October 15) the merger was approved by at least 75 per cent of shareholders in the Aberdeen fund.

They will now see their shares exchanged for shares of "equivalent type and value" in the SLI Paif, according to Mitchell. 

Dealing in the funds will be suspended at noon on November 25 until 9am on November 29 in order to allow the merger to complete.

ASI gated the two funds in March 2020 following advice from independent valuers that it was not possible to provide accurate and reliable valuations for all properties held in the funds.

They were then both re-opened in November last year.

In May this year, Aviva Investors announced it was closing its property fund due to liquidity concerns.

The next month, Aegon Asset Management did the same, due to similar liquidity issues.

The FCA has been reviewing the structure of the funds for over a year, and in May postponed its decision to reform the sector while it looks into creating a new fund structure to address the issue.