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SLI switches UK Property fund to a PAIF to deliver more income to investors
by Elsa Buchanan on Aug 27, 2013 at 11:52
Standard Life Investments (SLI) has converted its £471 million UK Property vehicle into a Property Authorised Investment fund (PAIF).
Following a trend to convert to PAIFs, the SLI vehicle, which was launched in 2005, has switched to the tax-efficient structure so that more of the income it generates makes it into eligible investors' hands.
It will continue to be known as the SLI UK Property Fund, though the change will enable tax-exempt investors to receive income from the fund, gross of the 20% corporation tax previously applied to income.
Both the manager Nigel Chapman and the fund's investment strategy will remain unchanged, SLI said, as it announced the move.
Under the new structure, the Edinburgh-based global asset manager added that the fund's estimated distribution yield will rise from 3.61% to 4.52% for qualifying investors.
Andrew Jackson (pictured), head of wholesale and listed real estate at SLI, said that PAIFs allowed eligible, tax-exempt investors such as registered pension schemes, ISA investors, charity and Self-Invested Personal Pension (SIPP) clients to benefit from a more efficient distribution of income via property funds, and the change sees SLI follow in the footsteps of Ignis and M&G, which in November moved to convert their leading property funds into PAIFs.
‘In an environment of low growth and low yields, this is a particularly relevant time to provide long-term investors with the opportunity to access a more tax-efficient, diversified source of income through investment in real estate,’ Jackson said.
‘Getting more of that income back into the hands of eligible investors without altering the risk profile of the fund can only be a good thing.’
According to Lipper, SLI's UK Property fund has delivered a 15.07% over three years to August 23, compared to a 18.04% rise by the IPD UK All Property Monthly benchmark.
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by Danielle Levy on Dec 04, 2013 at 11:37