Aberdeen Investments is seeking investor approval to combine the Abrdn Real Estate Fund and the Abrdn Real Estate Feeder Fund with the Abrdn Global Real Estate Fund (GREF), creating a flagship global hybrid real estate fund with over £700m (€818m) in assets.
Aberdeen said the proposal was is designed to simplify the fund offering while bringing together assets into a larger, more diversified vehicle.
The proposed merger follows changes introduced to both funds in 2024 to pursue a “hybrid strategy”, combining direct property holdings with global indirect investments. Aberdeen has been shifting the composition of the funds’ portfolio to 45% direct property, 45% indirect real estate investments and 10% cash.
The merger is expected to complete in November 2026, subject to investor approval, and upon completion, investors would gain access to a “high-conviction, research-led global real estate portfolio, combining direct property investments in the UK and international markets with a diversified allocation to global listed real estate securities”, Aberdeen said.
Aberdeen added that the “enhanced portfolio” would “broaden investors’ direct real estate exposure beyond the UK, providing access to a wider opportunity set across global real estate markets” while maintaining Aberdeen’s active, research-driven investment approach.
Aberdeen said a larger combined fund would offer investors the “benefits of greater diversification, increased scale and enhanced flexibility” in managing liquidity, while maintaining exposure to the long-term opportunities available across global real estate markets.
Anne Breen, global head of real estate at Aberdeen Investments, said: “Real estate remains an important part of investors’ portfolios, but the way investors want to access the asset class continues to evolve. Over recent years we have taken significant steps to modernise our range, combining the long-term benefits of direct property ownership with the flexibility offered by more liquid real estate investments.
“We believe bringing these funds together is the natural next step in that evolution. A larger, more diversified strategy would provide investors with access to a broader opportunity set across global property markets, while creating a more streamlined and scalable platform from which to target long-term growth and income.”
If approved, investors in the Abrdn Real Estate Fund would receive equivalent holdings in the Abrdn Global Real Estate Fund. Aberdeen expects ongoing charges for investors to remain unchanged or be slightly lower following completion of the transaction.
Investors will be asked to vote on the proposal, with completion currently expected in November 2026, subject to the necessary approvals.
Portfolio transition ‘consistent with FCA’s direction of travel’
In 2020, the Financial Conduct Authority (FCA) proposed notice periods of either 90 or 180 days for open-ended, daily traded funds that invest more than 50% of their assets in direct real estate, although it has yet to make a decision on the matter.
Aberdeen said the current transition towards 45% direct, 45% indirect and 10% cash “appears consistent with the FCA’s direction of travel”. It added: “While it is for the FCA to determine the final framework following consultation, we believe measures that seek to align fund liquidity more closely with the characteristics of the underlying assets can benefit investors meanwhile.”
Euan Anderson, investment director, real estate at Aberdeen Investments, said: “We welcome the FCA’s focus on ensuring that fund liquidity arrangements remain aligned with the underlying assets held on behalf of investors. The industry has evolved significantly in recent years, and Aberdeen has been taking proactive steps to adapt, including transitioning our real estate funds towards hybrid structures that combine direct real estate with more liquid investments.
“We believe that greater scale, diversification and liquidity management flexibility will be increasingly important going forward, which is reflected in our proposal to combine the Abrdn Real Estate Fund and Abrdn Global Real Estate Fund into a single flagship solution.
“Bringing these strategies together would create a broader global property portfolio and allow us to focus our resources on delivering the best possible outcomes for investors. We look forward to engaging constructively with the FCA during any future consultation.”
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