BMO Property Growth & Income reopens
Suspended in March
The BMO Property Growth & Income fund has reopened, having closed amid a wave of other open-ended property vehicles in March as a result of valuation concerns stemming from the ongoing pandemic-driven market sell-off.
BMO GAM was among SJP, Columbia Threadneedle, LGIM, ASI, Kames Capital and Janus Henderson in firms forced to suspend their property funds in March as their independent valuers declared they were unable to accurately or fairly value the properties in their portfolios.
Investors in the fund to be able to place trades from 4am on Tuesday, 16 June 2020.
Investment Week understands that BMO GAM's independent valuers are attempting to lift their "uncertainty" clauses on a sector-by-sector basis, with under pressure sectors like retail likely to be the last.
BMO Property Growth & Income comprises both direct property and property securities, sitting within the IA Property Other sector, and was therefore it was "no surprise" it was able to open sooner due to its allocation of around 30% to physical property, co-founder of Fairview Investing Ben Yearsley explained.
He added that while it is good news that the suspension has been lifted, he does not "expect many others yet" as "massive question marks" remain "over daily dealing funds with mainly physical property".
BMO GAM confirmed in a statement that its valuer had removed the material uncertainty clause from valuations covering the industrial and logistics sectors in the UK.
The firm explained that while around 7% of the fund's assets will still be subject to material uncertainty, "this is well below the suspension trigger set by the FCA (20% of total assets being subject to material uncertainty qualification), allowing dealing to be resumed in the funds".
It added: "Despite dealing being suspended in the Fund since 18 March 2020, it has been a busy period of asset management for the Fund's physical property portfolio. Since the beginning of March 2020, the fund has concluded various transactions across the portfolio, including new lettings and lease renewals."
Managed by George Gay and Marcus Phayre-Mudge, the fund is down 8% and 0.2% over one and three years respectively, while it has returned 16% over five years, according to FE fundinfo. The IA Property Other sector is down 7.7% over one year, and up 4.3% and 21.4% over three and five years respectively.
