Aviva Investors has resumed trading on its European property fund after improved liquidity in the vehicle.
Aviva Investors suspended trading on the fund, which is managed by Julian Taylor, on November 4, 2008 after the fund’s cash level diminished from the beginning of the year.
The group says the fund’s most recent real estate sales have restored liquidity to a point where it can meets its outstanding redemption requests and ongoing capital expenses. Once all outstanding redemption requests have been fulfilled and after an allowance for the fund’s ongoing capital expenses, the net cash weighting is expected to be approximately 20 per cent.
Aviva says that while new investments are being accepted, the group will no longer be accepting subscriptions into the existing Sterling hedged share classes, which the group says will reduce the fund’s potential collateral liabilities and improve liquidity.
The group is also launching two new Sterling share classes, which will not be hedged against the Euro, and will be available for future subscriptions.
Aviva managing director continental Europe real estate Ben Stirling says: “We’ve worked hard in a difficult real estate market to bring the fund back to a good liquidity position and are delighted the fund can return to normal trading.
“Since suspending dealing in the fund late last year we have carefully managed liquidity levels and the sale of properties in a measured manner to get the best possible price.
“The outlook for the Fund is increasingly positive. Over the past few months there has been a clear improvement in key economic indicators for the Eurozone and we now believe the worst of the valuation falls are behind us.”
Whitechurch Securities managing director Gavin Haynes says: “Liquidity issues were a big wake up call and I expect there is a bias to those funds that negotiated them better.”