Schroders real estate trust to close

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The £64.4m Schroder Global Real Estate Securities trust is closing after it failed to attract sufficient assets.

The directors of the trust have decided to close it, subject to shareholder approval, just over a year since appointing Schroder Real Estate Investment Management as the manager and adopting a new investment strategy. The fund is run by Tom Walker and Hugo Machin.

The trust’s directors said in the “current market conditions” it was not possible to grow assets, despite “extensive marketing efforts”.

Since Schroders’ appointment on the trust “the company has performed well both in absolute and relative terms and the directors continue to believe in the investment proposition”, says a statement from the directors.

“However, they also recognise the difficulties of attracting long term demand for a closed-ended vehicle which is perceived to lack sufficient critical mass, impacting upon liquidity in the company’s shares and the discount at which they trade.”

The liquidation still needs to be approved by shareholders, who will be offered the chance to reallocate to an open-ended real estate fund run by Schroders or cash out.