Ignis Asset Management has converted its UK Property Fund into a Property Authorised Investment Fund (PAIF).
The conversion to PAIF status, approved by unitholders last month, gives Ignis a tax-efficient property fund for investors, including charities and pension funds.
Ignis has also established its UK Property Feeder Fund which will solely invest in the Ignis PAIF. Ignis said the fund provides an option for those unable to hold PAIF shares for administrative reasons.
Ignis real estate investment director George Shaw said conversion of the Ignis UK Property Fund to PAIF status would not alter the risk profile or underlying investment strategy.
He said: “UK commercial property continues to be attractive to investors due to its income yield, potential for capital growth supported by the improving economic outlook and an asset class that offers clear diversification benefits.”
PAIFs are generally exempt from UK tax on income, meaning eligible exempt investors can now receive distributions gross of tax instead of net. This will result in a significant uplift of up to 25% in income returns for eligible investors.
The fund has delivered a net return to investors of 43.1% over five years. Ignis was sold to Standard Life by the Phoenix Group in March this year.