Swiss bank UBS plans to dismantle a $6 bn (EUR 4 bn) real estate fund by selling property assets and returning the proceeds to the fund's investors. The Zurich-based lender believes the sale to be in the best interest of investors because it creates liquidity quickly, while preserving value, Dow Jones Newswires said, quoting a letter that the bank sent to clients this week. The fund, which is run by UBS' private bank, will carry out the sales over a 'reasonable period of time', the bank added.
Swiss bank UBS plans to dismantle a $6 bn (EUR 4 bn) real estate fund by selling property assets and returning the proceeds to the fund's investors. The Zurich-based lender believes the sale to be in the best interest of investors because it creates liquidity quickly, while preserving value, Dow Jones Newswires said, quoting a letter that the bank sent to clients this week. The fund, which is run by UBS' private bank, will carry out the sales over a 'reasonable period of time', the bank added.
The fund had considerable exposure to the US and the UK property markets and was hit hard by the credit crisis in those markets, UBS said. The lender halted redemptions from the fund in December last year due to the lack of liquidity. It warned at the time that investors in UBS Wealth Management Global Property Fund would not be able to withdraw funds until the end of 2009.
'The portfolio of the Global Property Fund can generally be characterized as high-quality buildings and the GPF hasn't invested in, and has no exposure to, the subprime mortgage market,' according to the letter.
The sale proceeds will be paid back to investors over time and in installments. Meanwhile, a freeze on redemptions as well as new subscriptions will remain in place until the fund is ultimately liquidated.
