These pages allow you to keep up-to-date on any new developments concerning the Brandeaux Ground Rent Income Fund (J44) and Brandeaux Student Accommodation Fund (J99). We also aim to make it easier for you to access previous correspondence and any associated documentation, and we have created archive news pages (available via the links on the left of this page) for this purpose.
Following the suspension of the Brandeaux Funds on 31 May 2013, Brandeaux had been providing indicative prices for the underlying funds each month enabling Friends Provident International to also provide indicative prices for Brandeaux Ground Rent Income Fund (J44) and Brandeaux Student Accommodation Fund (J99). The last official published price for the Brandeaux Funds was on 31 May 2013. The prices provided in the tables below for the Friends Provident International mirror funds J44 and J99 are for indication purposes only, based on the underlying funds Net Asset Values provided to us by Brandeaux and should not be viewed as a guarantee of the actual value achievable to you.
Please note that with effect from May 2014, Brandeaux are no longer providing underlying fund prices for the Brandeaux Student Accommodation Fund, and as a result Friends Provident International are unable to provide indicative prices for J99.
The price at which units are sold will be dependent on when proceeds are released by Brandeaux, not the date we receive your instruction. Any instructions received by Friends Provident International to encash units in Brandeaux Student Accommodation Fund (J99) will be logged and will be actioned once the suspension has been lifted and once proceeds are received from Brandeaux.
The Brandeaux Ground Rent Income Fund (J44) is currently in the process of being wound up. As a result of this decision from Brandeaux, switches out of J44 will not be accepted. Please refer to our update dated July 2014 for further details.
|Price date||Indicative Offer Price (GBP)||Indicative Bid Price (GBP)|
|30 Apr 2014||2.993||2.783|
|31 Mar 2014||2.782||2.587|
|28 Feb 2014||2.785||2.589|
|31 Jan 2014||2.788||2.592|
|31 Dec 2013||2.791||2.595|
|29 Nov 2013||2.793||2.597|
|31 Oct 2013||2.796||2.599|
|30 Sept 2013||2.799||2.602|
|31 Aug 2013||2.801||2.604|
|31 Jul 2013||2.950||2.743|
|28 Jun 2013||2.953||2.746|
|Price date||Indicative Offer Price (GBP)||Indicative Bid Price (GBP)|
|30 Apr 2014||2.535||2.357|
|31 Mar 2014||2.538||2.359|
|28 Feb 2014||2.541||2.362|
|31 Jan 2014||2.543||2.364|
|31 Dec 2013||2.546||2.366|
|29 Nov 2013||2.548||2.369|
|31 Oct 2013||2.551||2.371|
|30 Sept 2013||2.556||2.376|
|31 Aug 2013||2.558||2.378|
|31 Jul 2013||2.668||2.480|
|28 Jun 2013||2.671||2.483|
Friends Provident International has received the following fund update from Brandeaux in relation to their Student Accommodation Fund:
"The directors of Brandeaux Student Accommodation Fund (Sterling) Limited (the “Fund”) continue to actively focus on creating liquidity for investors currently wishing to redeem their investment, in a way that realises appropriate value for the Fund's high quality assets. They continue to monitor the public markets and consider all options to create liquidity, following the decision on 26 June 2014 not to proceed with an Initial Public Offering (“IPO”) at that time.
Since the end of June the Fund has had discussions with a significant number of credible parties who have expressed an interest in acquiring the property portfolio. The Fund and its advisers are continuing to explore these expressions of interest to ascertain whether there is a basis on which to achieve an outright sale of the portfolio at an appropriate value.
The share price of the Fund was suspended in April 2014 due to the uncertainty of the share price following the proposed IPO. Such pricing would have been based on the stock market price of the new public company, rather than on the independent property valuation which Savills carries out in accordance with the Royal Institution of Chartered Surveyors (“RICS”) Valuation Professional Standards. As the IPO did not proceed, Savills has now completed a valuation of the property portfolio as at 31 August 2014 for the Fund's financial year end. The directors consider it appropriate to issue a Fund share price which, based on this latest property valuation and the net profit of the Fund to 31 August 2014, is £2.92 per share compared with the last published share price of £3.11. Resulting share prices for Brandeaux Student Accommodation Fund (Multi Currency) Limited and the Dual Asset Funds are now shown on the Brandeaux website at www.brandeaux.com.
Savills has valued the property portfolio at £1,115.5 million as at 31 August 2014 on a 6.1% net initial yield. This compares with the Savills valuation at 31 August 2013 of £1,187.9 million. This downward movement of £72.4 million or 6.1% during the year has had an 8.2% negative effect on the net asset value of the Fund as a result of gearing. The valuation movement is mainly attributable to three factors, namely a) Savills' opinion that property operating costs assumed for valuation purposes should be increased, although actual property operating costs per bed incurred by the Fund have remained approximately the same year on year, b) an assumption that buyers' costs deducted from the valuation should be based on a sale of property rather than property being sold within a corporate entity which would save the purchaser Stamp Duty Land Tax, and c) the elimination of the portfolio premium, which was previously included to reflect the added value of the portfolio as an integrated business, on the basis that Savills does not believe that market evidence continues to support an explicit premium.
To be clear, the Savills valuation is their opinion of value of the properties determined in accordance with the RICS Valuation Professional Standards of what a willing buyer will pay a willing seller for the properties. In practice, the sale price achieved may be lower or higher than valuation.
Operationally, the portfolio has continued to perform well with currently over 99.5% of the portfolio's 16,827 rooms rented for the 2014/2015 University year at core rental rates 3.3% higher than for 2013/2014. Also summer net rental income (outside the core University year rental period) for the year to 31 August 2014 was £5.4 million against £4.1 million for the previous year, demonstrating the opportunity to continue to grow rental income during the non-core period."
We are in the process of reviewing this latest information from Brandeaux on the underlying fund and how it may impact the J99 Brandeaux Student Accommodation Fund. Once reviewed, we will be able to provide a further update on this news page, and contact policyholders and their advisors with any information relevant to the J99 fund.
We are aware of the press speculation regarding the sale of Liberty Living and have been in contact with Brandeaux today for clarification. They have confirmed to us that this information is inaccurate and we are expecting them to issue an update later today on the subject. A copy of their announcement is available here.
We have received confirmation from Brandeaux that following the sale of the remaining properties owned by the Ground Rent Funds, a further payment will be made to shareholders in the second half of July 2014. A copy of their announcement is available here.
Friend Provident International has been advised that Brandeaux will retain 1% of shareholdings to cover costs incurred in winding-up the fund. We have concluded that it is not viable to retain what, for many policyholders, will be a negligible unit holding and we intend to close the J44 Fund following receipt of the July payment, rather than waiting to see if any residual payment will be made following completion of the winding-up process by Brandeaux.
Once this July Payment has been received by Friends Provident International, we will close the J44 Fund and distribute the proceeds received from Brandeaux to each investor by switching out all remaining unit holdings from the J44 Fund into L37 Schroder Global Multi-Asset Income (GBP HDG) fund. Further information is detailed in the July 2014 letter to policyholders.
We will maintain details of the unit holdings of all policyholders invested in the J44 Fund as at the date that the July Payment is received. If any final payment is received from Brandeaux upon completion of the winding-up of the underlying fund, this final payment will be allocated pro rata to affected policyholders, subject to the de minimus limits stated in the July 2014 letter to policyholders.
In light of the circumstances, we have considered the options available to us and decided that closure of the J44 Fund at the earliest instance is in the best interests of our policyholders.
On 19 May 2014, Friends Provident International Limited were informed by Brandeaux of their proposed plans to restructure Brandeaux Student Accommodation Fund (Sterling) Limited (the “Brandeaux Student Accommodation Fund”), the underlying fund into which the J99 Brandeaux Student Accommodation Fund (“the J99 Fund”) invests. The proposed restructuring, if it went ahead, would involve an initial public offering ("IPO") of shares in Liberty Living plc, a newly formed company that would acquire the assets from the underlying Brandeaux Student Accommodation Fund.
We refer to our May 2014 update and letter informing policyholders of the proposed restructuring by Brandeaux. Since then, we understand from a Regulatory News Service ("RNS") announcement released by Liberty Living plc on 26 June 2014 and a subsequent announcement from Brandeaux on 30 June 2014 that the Brandeaux Student Accommodation Fund has decided not to proceed with the IPO at this time.
According to the announcements, this decision has been reached due to adverse public market conditions and despite a positive response to Liberty Living plc and its underlying portfolio from prospective investors.
Additionally Brandeaux has stated:
“The outlook for Liberty Living's business remains very positive, with current reservation levels of 90% for the 2014/2015 academic year, and its operations remain unaffected by the decision not to proceed with an IPO. The management team will continue to focus on driving value on behalf of the existing investors in the Fund, and the Fund will continue to consider all options for creating liquidity for its shareholders.”
The full announcements and a copy of our letter to policyholders invested in the J99 Fund are available via the links below:
J99 Client Letter
Further information will be released as soon as it is forthcoming and until Brandeaux are able to confirm liquidity has been created, the J99 Fund will remain suspended.
Please find attached a copy of a letter that has been sent to policyholders invested in J99 Brandeaux Student Accommodation Fund, following the update from Brandeaux on 19 May 2014.
Friends Provident International is reviewing this latest information from Brandeaux on the underlying fund and how it may impact the J99 Brandeaux Student Accommodation Fund.
We will write to policyholders again as soon as any further information is available.
Further to our previous letters in December 2013 and March 2014, Friends Provident International has received confirmation from Brandeaux that a further payment will be made to shareholders at the end of April 2014.
Once this payment has been received by us, we will distribute the payment for life clients by switching out a percentage of each client's holdings from J44 into L37, as we have done for the payment received from Brandeaux at the start of April 2014.
Please note however that due to the close proximity of the two payments from Brandeaux, Friends Provident International has made the decision to only pay out proceeds once both switches have taken place, in order to avoid any un-necessary delays in sending monies to policyholders.
As a result of this decision we will not be in a position to prioritise individual payments. In terms of a timeframe for proceeds to be despatched to your account (where requested), we anticipate that all payments will be made by 31 May 2014.
A copy of the letter sent to affected policyholders can be found here.
Although the underlying fund into which the J99 Brandeaux Student Accommodation fund invests remains suspended, Brandeaux made the following announcement on 16 April 2014:
"The directors of Brandeaux Student Accommodation Fund (Sterling) Limited (the “Fund”) are continuing to actively review various options with the aim of creating liquidity for its existing shareholders. The Fund has appointed investment banking and other advisers to assist the directors in assessing these various options to create liquidity.
To give as much flexibility as possible around the various options, the directors of the Fund have applied to the Irish Stock Exchange (the “Exchange”) to delist the Class A Participating Redeemable Preference Shares (the “Shares”) of the Fund from the Official List and from trading on the Main Securities Market of the Exchange. The Exchange has agreed that the Shares will be delisted with effect from 16 April 2014.This delisting does not affect the directors’ ongoing review of various options with the aim of creating liquidity for existing shareholders.
The directors are acutely aware of the difficulties IFAs face in dealing with their clients invested in the Student Accommodation Funds and the inability to give any precise indication of timing on the creation of liquidity. The Student Accommodation Funds and their advisers are working tirelessly to reach the best possible solution for investors and a further statement will be made as and when there is further information of significance to report."
Friends Provident International do not require any of our fund links to maintain a Stock Exchange listing, we therefore do not see this as a significant change or that it will negatively impact the J99 Brandeaux Student Accommodation fund.
We understand from the Brandeaux Directors that de-listing may provide them with more flexibility as they continue to investigate options for raising liquidity for the Fund. We will keep investors in the J99 Brandeaux Student Accommodation fund updated on developments as and when they are announced by Brandeaux.
Further to our previous letter in December 2013, Friends Provident International has received confirmation from Brandeaux that a further proportional payment will be made to us at the end of March 2014.
Since the last payment was received from Brandeaux, Friends Provident International has undertaken a review of the alternative funds available for your investment. The result of this review is that we will make L37 Schroder Global Multi-Asset Income (GBP HDG) the default fund for this proportional switch, instead of the M65 Investec GS Sterling Money fund. We consider this to be a more suitable and appropriate fund for customers who are invested into the Brandeaux fund.
Once the proportional switch has been made in April 2014, investors will receive a switch confirmation detailing the amount released from J44 Brandeaux Ground Rent Income, the number of units purchased in L37 Schroder Global Multi-Asset Income (GBP HDG) and their value.
A letter has been sent to investors providing more details on the proposed default fund, a copy of which can be found here: Client letter
Friends Provident International received the following update from Brandeaux on 21st February 2014, relating to the underlying fund into which J99 Brandeaux Student Accommodation invests:
Further to the recent press speculation, the Brandeaux Student Accommodation Fund (Sterling) Limited and the Brandeaux Student Accommodation Fund (Multi Currency) Limited confirm that they are continuing to actively review various options with the aim of creating liquidity for their existing shareholders. The options being considered include a potential initial public offering of the assets of the Brandeaux Student Accommodation Fund (Sterling) Limited. The consideration of an initial public offering is at an early stage and there is no certainty at this time that this option will be pursued.
A further statement will be made as and when appropriate.”
As soon as any further update is provided, we will update this site accordingly.
Brandeaux continue to explore solutions to release liquidity, however at the current time there are no further updates available. Please be assured that we remain in regular contact with Brandeaux and we will provide information as and when it is available.
Friends Provident International confirm receipt of the first payment from Brandeaux as part of the wind-up process for J44 Brandeaux Ground Rent Income Fund.
A switch for 34% of the units held within J44 into M65 Investec GS Sterling Money will be processed over the coming week, with a pricing date of 27 January 2014.
We are currently preparing all previously requested redemption payments, which can only be actioned once the above switch has completed. Due to the number of payments involved, these payments will be made over the following 5 weeks and we appreciate your patience during this time.
As well as the updates above, you may find the following links useful.
If you have any questions regarding your policy with us, please contact our Customer Services team or if you require further information on the above funds, please contact our Investment Proposition department who will be happy to help.
Please note Friends Provident International does not provide advice or sell products direct to the customer.
For further information on our products or services please contact your financial adviser.
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