Legal & Generalâ€™s Â£1.3 billion UK Property Fund Attains PAIF status.
28 May 2014
Legal & General’s £1.3 billion UK Property Trust on 24 May 2014 converted into a Property Authorised Investment Fund (PAIF) structure, resulting in more tax-efficient income for many investors. As a result of the conversion, the fund has also been renamed and the PAIF is called the Legal & General UK Property Fund.
A PAIF is a tax-efficient property fund which keeps track of three different income streams: rental, interest and dividend income. Rental income and interest distributions from the L&G UK Property Fund will be paid out gross to qualifying investors, benefiting those investing through an ISA or within a pension in particular. Unit holders who are ineligible or unable to invest in a PAIF can access the fund by receiving units in a feeder fund.
The Legal & General UK Property Fund is one of the fastest growing funds in its sector, having increased assets from £100 million to over £1.3 billion since inception in 2006, and it continues to receive inflows from retail and institutional investors. The fund invests in a diversified portfolio of UK commercial property assets and has outperformed the Lipper Property IMA Sector peers over one, three, and five years, with 1% per annum outperformance over the five years to January 2014.
Michael Barrie, Director of Fund Management at Legal & General Property and Co Fund Manager of the Legal & General UK Property Fund, said:
“Property offers a generous yield relative to other assets and this has contributed to a continued resurgence in investor appetite for the asset class. Furthermore a more broad based economic recovery has helped to fuel occupier demand, pointing to very strong real estate returns over the course of 2014 and beyond.
“Our unit holders were overwhelmingly in favour of converting the Fund and can now start to benefit from new tax efficiencies when investing in UK real estate.”
Matt Jarvis, Co Fund Manager of the Legal & General UK Property Fund, commented:
“Using the property platform’s unrivalled sector specialist skills, we continue to carefully stock pick well located assets that we believe are strongly supported by enduring occupier trends and/or positive structural shifts, thereby offering the potential for long term capital growth. Additionally, with a strong focus on active management, we work hard to explore interesting asset management opportunities that we believe will not only help to future proof our portfolio and protect values but significantly enhance returns over the shorter term.”
Legal & General Property manages £13.1 billion of assets in property, as at 31 March 2014.
Notes to editors
The information contained in this press release is intended solely for journalists and should not be relied upon by private investors or any other persons to make financial decisions.
The value of investments and any income taken may fall as well as rise, and investors may get back less than they invest. The value of property is generally a matter of valuer’s opinion rather than fact.
The tax efficiency of PAIFs is based on current rules. The current tax situation may not be maintained. The benefit of the tax treatment depends on individual circumstances.
The Legal & General Group, established in 1836, is one of the UK’s leading financial services companies. As at 31December 2013, we were responsible for investing £452 billion worldwide on behalf of investors, policyholders and shareholders. We also have over 7.9 million customers in the UK for our life assurance, pensions, investments and general insurance plans.
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PR Manager Legal & General Group
t: +44 (0) 203 124 2092