Lothbury Investment Management Limited has confirmed the liquidation of its UK balanced open-ended property fund, Lothbury Property Trust.
The fund owned £848 mln (€1 bn) of net assets at the end of April this year. Its biggest assets are the Clarendon shopping centre in Oxford city centre and the Sheraton Park student accommodation property in Durham.
In a statement, the investment manager said that the decision is 'driven by the shifting investment needs of its primary investors, namely corporate UK defined benefit pension schemes'.
Following a significant rise in interest rates over 2022 and 2023, many of the fund’s investors have achieved fully funded status, substantially reducing their requirement for property as part of their investment portfolios. This development reflects a broader trend within the industry, with other investment managers also impacted by improved funding ratios for pension schemes.
'The decision to terminate the fund was not taken lightly and only after due consideration of several other options. However, on balance, it was believed that it presents the most equitable solution for all of our investors and allows us to distribute the proceeds in an orderly and efficient manner,' said Adam Smith, CEO of Lothbury Investment Management.
He added: 'We remain committed to our investors and will continue to manage the wind down process with the utmost care in order to get best price whilst providing full transparency. We are incredibly proud of the fund's performance over the last 24 years, outperforming the benchmark in 70% of the years prior to the pandemic.'
Lothbury Investment Management will, in the meantime, continue to expand its work on a growing number of mandates from Nomura Real Estate and other clients.
