The fund suspension from SJP is a proactive measure set to protect the interests of clients.
In addition, SJP aims to manage potential risks and maintain the balance of the property unit trust, as well as the life and pension funds.
A temporary reduction of 15 basis points in the annual management charge will apply to the unit trust and will remain under review.
The suspension and deferral is thanks to a few challenges:
- Fall in demand for UK commercial property;
- Office space remaining vacant after the Covid-19 pandemic and employees continue to work from home, and
- Clients have increased withdrawals or limited investments.
Tom Beal, director of investments at St. James’s Place, said: “We have taken this step to protect the interests of clients. A combination of factors has led to our decision to suspend dealings in the Property unit trust and defer payments in the pension and life funds. This action is also aimed at preventing the challenge of having to sell properties quickly to generate cash. Selling properties under such pressure may lead to the fund manager selling them for less than their actual market value, potentially resulting in financial losses for the fund and its investors.
“During this period of suspension, we will be assessing market conditions and closely monitoring valuations of properties within the fund. We are committed to resuming dealing as soon as we are satisfied that conditions are right.”
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In March 2023, SJP looked strong. It registered profit before tax attributable to shareholders of £501.8m for the year 2022, a surge of 42% compared with £353.8m a year ago.
Majority of this growth was driven by the income that the firm garnered from annual product management charges on funds under management (FUM).
Profit and total comprehensive income for the year also jumped 41% to £405.4m from £287.6m in 2021.
For the year ended 31 December 2022, tax attributable to shareholders’ returns was £96.4m versus £66.2m a year ago.