Troubled property firm Brandeaux is to wind up six of its long-suspended property funds following calls from investors wanting to exit the vehicles.
The three-strong Ground Rent fund range will be wound up as soon as possible, and in doing so this will cause the three Dual Assets funds - which invest in both the Ground Rent and Student Accommodation funds - to also close.
The group said in an announcement £173m of liquidity has been released through property sales so far for investors in the Ground Rent funds, representing some 37% of the total assets.
Brandeaux said it is seeking to wind up the funds once all properties have been sold.
"Given the desire that has been expressed by investors in the Ground Rent funds to realise liquidity... the directors have resolved to market and sell all the remaining properties within the Ground Rent funds. Once completed, the intention is to wind up the funds," it said.
Brandeaux said net proceeds of the sales - after further fees including transaction costs and operating cash requirements have been deducted - could be released to investors shortly.
Brandeaux added: "It is presently anticipated this will take place early in the New Year."
However, a deal to sell the rest of the property in the Ground Rent fund, intended to complete last year, has fallen through, which the company described as "unexpected and disappointing".
"The potential buyer for our remaining properties that we reported in our September update as being at an advanced stage failed to complete the purchase in the agreed time frame," Brandeaux said.
Brandeaux added it has written to all shareholders, noting it intends to start making pro-rata redemptions so that each investor can receive a proportion of available liquidity based on their current percentage shareholding.
Dual Asset funds
Meanwhile the Dual Asset funds, which invest in the Ground Rent and Student Accomodation funds, will also distribute shares of the net proceeds from the Ground Rent fund, before a similar wind-up is carried out.
Brandeaux said: "Once the Ground Rent funds are wound up, the Dual Asset funds will no longer be invested in both asset classes. The directors therefore intend to wind up the Dual Asset funds in due course."
However, that process is likely to take more time as the Dual Asset funds are also invested in the group's Student Accommodation funds.
The news will likely be welcomed by investors who have been stuck in the funds for over two years. Last summer, IFAonline sister title Investment Week revealed some investors had been trapped in several Brandeaux property funds for as long as 27 months.
Its eight-strong range of funds - which includes the £900m Student Accommodation fund and £92m Ground Rents fund - has been suspended indefinitely for many months.
Brandeaux added up to 80% of the property in its Ground Rent funds – which is mostly invested in ‘prime’ central London locations – has now been put up for sale.
In October, Brandeaux admitted the Ground Rent fund would have to take a 5% writedown on its net asset value (NAV) as the portfolio tried to free up liquidity.
Meanwhile, its Student Accommodation fund took a 4% hit to NAV.
Turning to the ongoing liquidity problems in its Student Accommodation funds, Brandeaux said it has been in various talks over property sales but the timeframe for selling the properties remains “uncertain”.
It also added “it will be necessary for liquidity to be achieved in the Student funds before the Dual Assets funds can be wound up”.
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