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No end in sight for trapped UBS Property fund investors

Latest update for fund gated in December 2008 leaves investors in the dark on when they will get the rest of their money.

No end in sight for trapped UBS Property fund investors

The latest update for the UBS Global Property fund, which was first gated in December 2008, has failed to provide investors with any real clarity regarding the return of their money.

The Jersey-domiciled fund was $6 billion (£4.5 billion) in size when trading was suspended in 2008. A year later, the fund’s board began to sell off the underlying properties and planned to distribute the proceeds to investors in instalments.

Since November 2009, approximately $3 billion has been returned to shareholders.

This included a $265 million pay out to investors in May 2017 following the completion of the fund’s asset sales programme in September 2016.

In the fund’s fourth quarter update, UBS informed investors that the process to wind down the fund structure, perform audits and filings, complete entity liquidations and tax matters was underway.

However, the firm described the liquidation process as ‘complex’ and said it could take a number of years to complete.

According to the update, the fund had $256.6 million of ‘restricted cash’ at the end of December 2017.

UBS said it was unable to pay this out until there was clarity regarding tax liabilities, litigation and other costs. At the moment, $67.3 million has been set aside to cover these costs, which means the net asset value totalled $189.3 million at the end of December.

Since launch in November 2004, the fund’s sterling share class has posted a 26.45% loss. Meanwhile, UBS continues to levy a management fee of 0.26%.

According to press reports, around 107,000 clients from around the world were invested in the fund, alongside staff. The fund had also been included in a number of UBS’s discretionary models.

UBS was contacted for comment.

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