Investors claim £1 billion student fund won’t return cash
By Simon Thompson
Mystery surrounds one of Britain’s leading student housing property funds after investors claimed they cannot get their money back from the fund managers.
Investors have been in touch with financial media claiming the £1 billion Brandeaux Student Accommodation Fund had kept them waiting for eight months to return their cash when their agreement included a six-month redemption time.
Brandeaux trades across the UK as Liberty Living, with student halls in London and 16 major university towns and cities offering students more than 15,000 beds.
Liberty Living is open for business and taking student bookings for the next academic year, starting at the end of September.
Attempts to discuss the issue with Brandeaux were unsuccessful – the only communication is a pre-written statement and no questions are answered.
Brandeaux has explained the agreement with investors include the right for the fund to limit redemptions under certain circumstances.
Brandeaux said: "The Brandeaux funds are all performing positively and own hard assets represented by high quality UK property. There is no basis for investors to ‘panic’ or to worry that they have ‘lost all their money’. All Brandeaux funds remain completely solvent and can meet all of their operational cash needs. The ground rent funds have no bank debt. The student accommodation funds have a modest amount of debt secured over the next 3 to 10 years and comfortably meet all loan covenants."
However, this does not confirm whether the investor complaints are founded, how many investors are waiting to redeem their investments and how much money is involved.
The fund previously suspended redemptions in December 2008 after a surge in investor calls to return cash.
After opening to new investors in April 2010, the fund has expanded to around £920 million.
Student housing has lured billions in investment over the past decade by offering highly attractive yields.
Returns in the sector regularly top 10%, compared with between 5% and 6% for buy to let properties and even lower returns on savings and other investments.
Over the last 20 years, AFS has been the home of student accommodation.
Throughout this period we have always offered the full range of student
accommodation and featured over 200,000 student houses on the site in every
University City in the UK.
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