LGIM mulls increased REIT exposure in potential hybrid solution to open-ended property question
In light of the current FCA consultation on funds investing in UK property, the firm said L&G PAIF and its feeder fund will remain open to investors.
In a letter to shareholders, the firm said it was «confident» it can continue to provide a solution that provides investors in the £1.3bn L&G UK Property Fund (PAIF) and the Legal & General UK Property Feeder fund access to the property sector.
Head of UK wholesale James Crossley said this could include a hybrid property fund option, offering access to both direct property and REITs, subject to regulatory guidance and approval of any proposed changes.
Open-ended property funds assert confidence following M&G closure as outflows mount
«As the FCA has previously communicated, any structural changes to UK property funds could require a long-term horizon to allow the market time to implement an appropriate solution while adhering to relevant regulation,» he said. «We would therefore expect to deliver any proposals in a timely manner.»
Despite the current FCA consultation on funds investing in UK property, the firm said L&G PAIF and its feeder will remain open to investors.
LGIM said fund size and liquidity also remain stable, with cash and REITs levels in the funds at 20.7% as of 31 October 2023. The completed sale of the Woodside Industrial Estate in Dunstable for £139m has «significantly increased» the fund's cash position, it added.
«LGIM is committed to providing investors ongoing access to direct UK property investments. We believe it remains an attractive diversifier in any balanced portfolio and is well positioned for those with long-term horizons,» the firm said.
M&G suspends open-ended UK property fund ahead of closure
Oli Creasey, head of property research at
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