Book value

Janus Henderson sells £1bn property fund above book value

Investors trapped in the Janus Henderson UK Property Paif have been told they can expect their money back in less than two months after the fund group sold the £1bn fund at a premium.

The asset manager informed shareholders on April 28 that it had begun liquidating the open-ended real estate fund after securing an anonymous single buyer to remove the fund’s direct real estate portfolio.

The value of the transaction was not disclosed, but Janus Henderson said the sale price was higher than the last independent valuation used to price the funds.

“We believe this offers a good outcome for investors given the continued uncertainty facing everyday real estate funds,” the fund group said in the update.

Proceeds will be returned to investors by mid-June

The sale is expected to end during the week of May 30. Janus Henderson said he would look to start returning money to investors around June 13, two weeks after the sale ends.

Janus Henderson revealed in early March that he was “exploring various options” for the fund, ahead of upcoming regulatory changes, which could see the Long-Term Assets Fund (LTAF), an open-ended fund with notice periods 90 to 180 days imposed on the industry.

Days later, he was forced to suspend the Janus Henderson UK Property Paif and feeder funds, as a wave of investors rushed out.

See also: Uncertain future for UK property funds as LTAF rule change looms

It’s unclear how generous the sale price is

That he was able to get a higher price for his real estate portfolio is “surprising,” said Oli Creasey, real estate research analyst at Quilter Cheviot.

“We still don’t know the exact circumstances that led to the sale, but the fact that it is taking place above book value further reduces fears that this was some sort of event in distress,” Creasey said.

“What we don’t know yet is how far above book value the sale will take place – there is clearly a difference between an additional 1% and 10% return – and how the fund will bear the costs of the sale (lawyers, agents, etc.), there is a risk that a small margin could further erode shareholder value,” he added.

“However, given the likelihood that Janus Henderson will not be a forced seller, we believe the fund is unlikely to trade at a price that does not produce a positive net shareholder return.”