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UBS has temporarily suspended investor withdrawals from its Euroinvest real estate fund, citing low liquidity and rising redemption requests. The fund, managed in Germany, holds assets worth around EUR 406.8 million (USD 469.4 million). The decision also includes a halt on issuing new shares to prevent further risks to investors. This move reflects a broader trend in global markets, where asset managers are restricting withdrawals due to pressure from increased redemption demands. Similar actions have been seen in private credit funds, especially in the United States.
UBS has suspended withdrawals from its Euroinvest real estate fund for a period that could extend up to three years, citing inadequate liquidity to meet investor demands. The decision was communicated through an investor notice reviewed by Reuters. Advertisement
The bank stated that in the current market conditions, its real estate arm, UBS Real Estate GmbH, decided to pause redemptions to safeguard the interests of all investors. It explained that allowing withdrawals at this stage could disadvantage remaining investors due to limited available cash within the fund.
The Euroinvest fund, based in Germany, had assets under management of approximately EUR 406.8 million, equivalent to USD 469.4 million, as per its latest available data at the end of the previous month. However, the fund's liquid reserves were not sufficient to handle the volume of withdrawal requests being made.
UBS further clarified that redemption requests submitted after the recent cut-off would not be processed. Alongside this, the bank has also stopped issuing new units in the fund. It indicated that bringing in new investments would not significantly improve liquidity and could expose new investors to higher risks, especially if the suspension continues or the fund eventually faces closure.
This development comes at a time when real estate funds globally are facing pressure due to tighter financial conditions, higher interest rates, and reduced property transaction volumes. Limited liquidity in such funds often arises because underlying real estate assets cannot be quickly sold without impacting valuations.
The move also aligns with a broader trend seen across global asset managers. Several firms, including Ares Management, Apollo Global Management, and BlackRock, have previously imposed limits on investor withdrawals in certain funds. In many cases, redemption caps of around 5% were introduced to manage liquidity pressures.
In recent months, increased redemption requests have been observed, particularly in private credit and real estate-linked investment vehicles. This has forced fund managers to adopt stricter controls to maintain stability and avoid distress sales of underlying assets.
Source Reuters
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