UBS puts 1.88 billion francs Credit Suisse real estate fund into liquidation

UBS has put a real estate fund of its former competitor Credit Suisse worth over US$2 billion into an “orderly liquidation” as at Thursday (Aug 15), the Swiss bank said.

The Credit Suisse Real Estate Fund International’s total net assets were worth 1.88 billion Swiss francs (S$2.9 billion) as of the end of June, UBS said. The fund’s value had fallen significantly during 2023, the bank said earlier this year.

UBS acquired Credit Suisse in 2023 after its long-time rival collapsed amid a string of financial setbacks.

UBS said 36 per cent of the fund’s total units in circulation in 2022 had been redeemed by the end of 2023.

“The process to sell assets over the past 18 months to meet ... redemptions has demonstrated the limited depth of the real estate markets,” UBS Fund Management (Switzerland) said.

UBS said to meet the outstanding 2023 redemptions would require the sale of the portfolio’s most liquid assets at an “inopportune time” in the real estate market.

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This would negatively impact remaining investors, decrease the attractiveness of the remaining portfolio and thus be likely to drive further redemptions, it added.