UBS Group AG, the Swiss banking giant, has reportedly placed a real estate fund from its former competitor, Credit Suisse, into “orderly liquidation.” This decision comes after the fund’s value significantly declined throughout 2023, leading to a significant number of investors redeeming their holdings.
The Credit Suisse Real Estate Fund International, with total net assets of 1.88 billion Swiss francs ($2.17 billion) as of June, faced substantial redemptions in 2023. According to UBS, 36% of the fund’s total units in circulation in 2022 were redeemed by the end of 2023.
UBS explained that meeting the remaining 2023 redemptions would require selling the portfolio’s most liquid assets at an inopportune time in the real estate market. This, they argued, would negatively impact remaining investors, reduce the attractiveness of the portfolio, and potentially lead to further redemptions.
This decision comes shortly after UBS reported strong second-quarter FY24 sales of $11.9 billion, up 25% year-over-year, exceeding analysts’ expectations. The bank also reported earnings per share of $0.34, significantly beating the consensus estimate of $0.12. UBS shares, however, have declined by 2.33% in premarket trading following the announcement of the fund’s liquidation.
Investors interested in gaining exposure to UBS can consider the Avantis International Equity ETF (AVDE) and the American Century ETF Trust Avantis Responsible International Equity ETF (AVSD).
