Hall & Wilcox has assisted APN Property Group to facilitate withdrawals for investors in illiquid funds without compromising the fund’s overall integrity, paving the way for other funds in the process.
Like many funds in the post global financial crisis world, two APN funds were confronted with the dilemma of liquidity, but with the help of Hall & Wilcox the two funds now offer a permanent liquidity solution each quarter for those investors wishing to withdraw from the funds. “In its restructure, APN has forged a new path which required a great deal of innovation and extensive work with ASIC,” said managing partner of Hall & Wilcox, Tony Macvean.
The restructure allows investors to redeem holdings in APN’s Property for Income Fund and Property for Income Fund No. 2, with approximately 75 percent of withdrawal proceeds being paid in cash and approximately 25 percent via a transfer of units in a new fund that holds the illiquid assets, the APN Unlisted Property Fund. APN aims to progressively sell down assets of the new fund in a three to five year time span to provide access to the final holdings of withdrawing investors.
Macvean said that he expected other funds in the Australian market to consider similar moves in the future. “We are hearing from clients in the sector that challenging conditions persist,” he said. “In turn, we would not be surprised to see further restructures of this kind in the coming months.”
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