Mansion Group Student Accommodation Fund suspended to protect investors
The Mansion Group has taken the decision to suspend its Student Accommodation Fund in a bid to protect investors.
The Channel Islands-listed fund, which has a value of £282 million, said the suspension was as a result of the “continuing net redemptions from cells” which have exhausted cash reserves at a faster rate than can be replenished. In July this year, the fund held around 10% of its net asset value in cash or near cash.
The suspension is effective from and including the 1st October 2013.
Investment adviser to the fund, Dartmoor Capital Management, made the announcement and said the board of the fund is taking steps to recover liquidity through various means, including the sale of assets and the raising or finance in order to re-open dealing.
“The board, along with the manager and other advisors, have been working diligently since this has occurred to restore liquidity by exploring a variety of options available,” the company said in a statement.
While an end-date for the suspension is not yet known, Dartmoor said it will be lifted as soon as dealing in the cells can be resumed in an order manner with sufficient liquidity and under conditions of controlled and reasonable trading.
There is nothing to suggest that anything untoward has occurred with the fund but this suspension will naturally affect many brokerages across the world, as the fund has proved very popular with investors and was available in sterling, euro, US dollar, Singapore dollar and Swiss franc.
The company said the high level of redemptions was due to “quite a sudden change in market sentiment caused by other funds in the sector.”
In July of this year, the Brandeaux Student Accommodation fund was suspended following an increase in redemptions.
However, the number of students in the UK is on the up, despite the increase in fees, as the UK’s top universities continue to draw in applications both from home-grown and foreign students. CBRE, the world’s largest commercial property and real estate services adviser, said student accommodation strongly outperformed other property asset classes last year, achieving a record level of investment. The sector delivered 9.6% total returns for the year.
Guardian will be keeping a close eye on developments in this sector and communicating those as and when they occur.