Louie Palu/The Globe and Mail
Eighteen months after redemptions were frozen to help the fund to raise cash by selling buildings, investors in the Great-West Life Real Estate Fund who want to redeem their holdings will get 58 per cent of their investments back.
The fund's managers asked unit holders last month if they wanted to take their money out of the fund, but warned if too many people opted to redeem their units they would only pay back a portion of each request.
The fund's managers suspended redemptions in December, 2008, on the fund, which has 155 properties with a stated gross market value of $3.37-billion as of March 31. The fund's managers have been in selling mode since, and had $425-million in cash at the end of the first quarter.
After reviewing the requests, the fund said it would pay each investor 58 per cent of what they requested. It didn't say what percentage of its investors asked for their money back, but did say they asked for more money than was available.
"The total amount of transfers, switches and withdrawals requested by unit holders exceeded the cash available for distribution on July 9," spokeswoman Marlene Klassen said. "Therefore, payments will be made as a percentage of the total amount requested."
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The company updated investors Friday afternoon, saying that 39 per cent of the fund's unit holders made a withdrawal request. Three quarters of the m asked for their money to be transferred to other funds the company offers.
Only 39 per cent of unitholders made a withdrawal request for some portion of their units, while 61 per cent chose to remain fully invested in the Fund. Moreover, approximately 76 per cent of the money requested was transferred to other funds within unitholders' policies.
The fund has to sell properties to fund redemptions, which is why it suspended redemptions as the recession took hold. But with vacancy rates climbing in commercial real estate and rental rates slipping, office towers and retail complexes are generally worth less today than before the crisis took hold.
GWL Realty Advisors Inc also suspended redemptions of the smaller $1.5-billion London Life Real Estate Fund in December, 2008, although its unit holders were able to access up to 60 per cent of their investment in 2009.
Only 20 per cent of the London Life fund's investors wanted their money moved out of the fund, the company said, but didn't specify what percentage of the fund's assets they held. Ninety per cent of those who wanted to move their money opted to transfer their money into another of the company's funds.
The fund's managers said it may give investors in the London Life fund another crack at redemption later this summer.