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Wednesday, October 22, 2014

Suspended student property fund

I have spoken many times about putting your faith in so called experts and fund managers to manage your assets or avoid the hassles of direct property management. The plus is you cede the day to day hassle of property management to somebody else. No more text, emails and calls informing you that the kitchen ceiling is dripping water, the central heating doesn't work or that my garden is over grown and what are you going to do about it?

Brandeaux fund devalued 
This week the FT carried a report about the Brandeaux student fund investing in student properties. The fund had to be closed to prevent an outflow of cash. The fund was due to float on the stockmarket but this float was suspended because of insufficient investor appetite. The value of the fund has been cut due to a revaluation and investors are likely to only receive 93% of the previous value. At the current time there is no exit route for investors. To read more about the travails of the investors have a look at this piece in the Investment Week. 

What it does say to me is that frequently fund managers are more bothered about collecting their big fat fees when a fund floats than about the long-term performance and welfare of the individual investors.  So bare this in mind before investing ALL your cash with somebody else!

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