Credit Suisse’s flagship real estate fund saw the value of its portfolio plunge by 9% in the third quarter as the global property correction accelerated.
(Bloomberg) — Credit Suisse’s flagship real estate fund saw the value of its portfolio plunge by 9% in the third quarter as the global property correction accelerated.
The Credit Suisse Real Estate Fund International is trying to sell “several properties in a challenging market environment,” it said in a statement Friday. It’s also seeking to diversify its portfolio, it added.
The latest move highlights the difficult situation that the $4.4 billion fund continues to be in after it limited payouts earlier this year as more investors asked for their money back. The fund’s management has already slashed exposure to retail properties and is now seeking to reduce its allocation to offices and instead buy more warehouses and homes.
The fund was already under pressure from the succession of rapid interest rate hikes which have hit commercial real estate values in the US and Europe, even before Credit Suisse collapsed into the arms of rival UBS Group AG earlier this year. It owned 54 properties in 11 countries with total assets of 3.88 billion swiss francs ($4.4 billion) at the end of June, according to the statement.
Read More: Credit Suisse Cuts Property Fund Payouts as Investors Exit
Credit Suisse announced last year its intention to cease over-the-counter trading in the fund by converting it to a net asset value-based one. That process will now take place on November 30, it said in the statement.
The existing way of trading “has increasingly not met the expectations of investors and the fund management in the recent quarters,” the firm said in the statement. It “continues to evaluate options for intermediation of fund units to investors in the future.”
–With assistance from Myriam Balezou.
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