Britain’s largest wealth manager, St James’s Place (SJP), has announced plans to liquidate £1.84 billion worth of commercial property funds, marking a significant retreat from the real estate sector amidst ongoing market difficulties.
The company, which oversees investments for one million UK clients, will close three major funds: the Property Unit Trust (£789.4 million), the Property Pension Fund (£622.8 million), and the Property Life Fund (£428.4 million). The orderly wind-down process is expected to span approximately two years.
The decision comes after SJP suspended withdrawals from its unit trust in October 2023, while implementing deferral mechanisms for pension and life fund redemptions. These measures were necessary to prevent property sales at distressed prices, protecting remaining investors’ interests.
More than 197,000 client accounts are affected by this strategic shift, with 117,000 investors currently unable to access their investments in the unit trust alone. The wealth manager has confirmed it has no immediate plans to launch alternative commercial property investment vehicles.
The move reflects broader challenges facing the commercial property sector, including the rise of online shopping and remote working practices. Several other major institutions, including Aviva, M&G, and Scottish Widows, have previously closed their open-ended property funds.
Management responsibilities for the wind-down process will transfer from Orchard Street to Invesco. Despite this significant change, SJP’s share price remained resilient, climbing 2.2 per cent to 875½p, suggesting investor confidence in the company’s strategic direction.
Clients will continue to incur fees during the wind-down period, albeit at a reduced rate for unit trust holders, with management charges cut by 0.15 percentage points to 2.2 per cent following the October suspension.
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