CS reports flows from real estate funds
The big bank had to downgrade one of its real estate funds due to the negative effects of rising interest rates.
According to the prospectus, the assets of the fund specializing in commercial real estate amounted to approximately CHF 3.26 billion as of January 2023.
Photo: Michael Buholzer/Keystone
Credit Suisse had to correct the valuation of one of its real estate funds by nearly 10%. The background to this is the negative effects of high interest rates on global real estate markets. Investors now want to withdraw more than 10% of the funds from the fund.
In the main markets of the “Credit Suisse Real Estate Fund International” (CS REF International) such as the USA, Great Britain and Germany, valuations in real estate markets were negatively affected as a result of higher interest rates, according to a credit Switzerland statement on Friday. These negative effects would have outweighed the real estate fund’s good leasing results.
According to unaudited figures, CS REF International’s net asset value will now drop to between CHF960 and CHF970 at the end of 2022, down from a valuation of CHF1070.72 a year ago. The distribution for 2022 should be between 35 and 38 francs, compared to 40 francs the previous year. Business results will be announced on March 23.
CS fund managers are now facing widespread redemption requests: as of December 31, 2022, redemption requests have been received for 13.3% of the issued shares, according to the statement.
According to the prospectus, the assets of the fund, which specializes in commercial real estate, amounted to about 3.26 billion Swiss francs as of January 2023. Approximately 22% of the funds are invested in the USA, about 15% in Germany, 13% in Canada and 11% % in Great Britain.
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