SJP Property Fund Charges £47 Million in Fees During Closure Period

St James’s Place (SJP) has charged its property fund investors over £47 million in fees since freezing withdrawals in October 2023, equating to more than £100,000 daily. The wealth management firm’s recent announcement to wind up its £1.84 billion property fund has sparked outrage among its 120,000 affected clients, who must continue paying charges during the two-year liquidation process.

The fund’s closure, triggered by mounting withdrawal requests amid property sector concerns, has left investors frustrated and unable to access their capital. The company’s decision to maintain its fee structure throughout the wind-down period has drawn sharp criticism from industry experts and clients alike.

The fund operates three variants, including the SJP Property Unit Trust holding £789.4 million and additional versions for pension and life insurance policies totalling approximately £1.1 billion. Annual charges range from 2.2% for the unit trust (reduced from 2.35% during the freeze) to 2.5% for life insurance and pension versions.

Investment performance has been particularly disappointing, with SJP property fund values declining by 2.4% over the past year. This stands in stark contrast to comparable investments like the TR Property trust, which achieved an 8.8% gain during the same period.

The company maintains that its charges encompass fund costs, ongoing advice, and administration services. SJP has pledged to return funds to investors periodically, with unit trust holders expected to receive initial payments by year-end. The firm emphasises its commitment to maximising property sale values while managing the liquidation timeline.

The Financial Conduct Authority is currently exploring regulatory changes for property unit trusts, including potential withdrawal notice periods to enhance fund manager flexibility in asset sales. This regulatory review comes as several fund groups face similar challenges in the commercial property sector.

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