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Important information about the SIP Property Fund

SIP Property Fund Update – 13 October 2016

 

It has now been 28 days since we implemented a deferral period for making withdrawals from the SIP property fund. We can confirm that our position remains the same and that the deferral period remains in place. We will continue to review the position every 28 days and will keep you informed of any updates. Should you have any questions please speak to your Financial Adviser or contact our Client Services team on 0117 975 2355.

Background

 

The aim of the SIP Property fund is to provide the opportunity to link benefits to the performance of a portfolio of UK commercial property. Since the result of the EU Referendum we have experienced an increase in the number and amount of withdrawal requests from this fund and over time this has led to a substantial reduction in the cash reserves that are held to meet these withdrawals
 
The sale of commercial property will allow us to raise the cash reserves required but this is time-consuming and needs to be carefully managed in such a way that a fair price is received both for customers seeking to make withdrawals and those who have chosen to remain invested for the medium to long term. A deferral period will allow us to increase cash reserves and protect the value of our customers’ investments.
 
The maximum deferral period will be 6 month (as per our Terms and Conditions), and the decision to defer will be reviewed at least every 28 days and updates will be provided on our website.

What Happens Next

 

Affected customers will be notified in writing of our decision to impose a deferral period and during the deferral period they will not be able to make redemption requests, switch, or transfer units out of the fund.
 
We will notify them again when the deferral period is due to end and advise them when requests to switch or encash units held within the fund can once again be submitted.
 
Any redemptions or switches received following this notification will be processed on the day the deferral period ceases.
 
A full fund suspension has not been applied as payments into the fund will continue to be accepted and fund valuations will be carried out as and when required.
 
Any previously agreed income distributions or pension drawdowns will continue to be paid from the fund, as will death claims, and if a customer has a selected retirement date which falls inside the deferral period they will still be able to access their retirement benefits.
 
We will remove the deferral restriction when the fund has both sufficient cash reserves to cover client redemptions outflows and an additional cash reserve where further redemptions would not result in another deferral being applied. 

In Conclusion

 

We believe that this deferral of redemption requests will ensure that fair and best value is provided to our customers. Through the sale of physical commercial property we can ensure a return to liquidity for the fund regardless of ongoing market conditions within the commercial property market. If market conditions ease sufficiently there is the potential for liquidity to be re-established in the shorter term before the 6 month time limit of the deferral period is reached, this will addressed as part of the ongoing reviews of the fund that will appear on this website, and customers will be informed in advance before the end of the notification period.

Investing involves risk and the value of investments and the income from them may fall as well as rise and are not guaranteed. Investors may not get back the original amount invested.