Irish Life blocks withdrawals from €500m property fund as investors rush to exit

ashambles said:
However Irish Life were only make gentle downward revisions in their property fund - it was out of step with the market reality - they for several months were using pre-crash values when people were exiting the property fund.
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I'm not the expert, but at the time the incurred-loss model was standard for accounting valuations while the world has since moved on to an expected-loss model.

The latter is much more forward-looking and is calibrated on interest rates, economic developments, etc.
 
Dave Vanian said:
A pension fund trustee is obliged to select a suitable range of funds for employees. The Irish Life Property Fund would tick any boxes to be included in a list of available funds. What else are you saying is part of their remit?
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No, their responsabilities go way beyond that - see https://www.pensionsauthority.ie/en...or_trustees/code_of_practice_for_trustees.pdf

They can contract with professional managers, 3rd parties but they are ultimately responsable for the management of the pension fund and its assets
 
Blackrock1 said:
everyone investing in a fund will be aware of what can and cannot be done and make their investment decision on that basis.
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In my opinion most investors in various funds have very little understanding beyond, 'its rated high risk or low risk' or 'its mostly equities'.

I once invested in a guaranteed return fund, which subsequently became 'cash locked'. I had never heard the term. it was an expensive lesson.
 
ashambles said:
However Irish Life were only make gentle downward revisions in their property fund - That fund incidentally is still down about 25% on 2008 values and indeed has never reached those levels since.
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While Irish property is up on 2008 levels.

This is why investing in property funds or the like is costly. Who knows why the gains in the market are not reflected in the value of the funds.
 
If someone invests directly in property, they could easily wait 6 months to liquidate their investment.

A property investment fund is usually much quicker, but can face the same forces.

Brendan
 
ashambles said:
That fund incidentally is still down about 25% on 2008 values and indeed has never reached those levels since.
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Where are you getting this information from?

This is the graph from their website which seems pretty impressive and seems to be up on 2008 (But only slightly up on the peak in early 2007) . But maybe I am looking at it incorrectly? (I would prefer to see a unit price graph)


1678350167611.png
 
Overall, I suspect that the Irish Life Property Fund does actually track the changes in Irish commercial property prices with the following adjustments:

+4% per year for rental income
-1% per year for management charges

There would be a further adjustment for whether the fund is valued on a buy or sell basis.

Brendan
 
Brendan Burgess said:
Where are you getting this information from?

This is the graph from their website which seems pretty impressive and seems to be up on 2008 (But only slightly up on the peak in early 2007) . But maybe I am looking at it incorrectly? (I would prefer to see a unit price graph)


View attachment 7305
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There seems to multiple versions of this fund within Irish life (different start dates) and sometimes without AMC as in your example, version below takes into account the standard AMC. So if we use the non-AMC version to be the index, it would imply commercial property (as opposed to individuals property funds) fully recovered for a while at least.

https://www.ilim.com/fund-fact-sheets/retail/+++-Exempt_Property_S2_Premium.pdf - that looks maybe about 10% down from the peak.

However where I got 25% down though came from my phone Irish life app, starts at 0 then maxes around Feb 08 @ 40 then March 2023 shows a value of about 28. (Perhaps it uses a higher AMC)

In any case the missing money is explained by DazedInPontoon...
 
The fund performance should reflect the underlying property markets. Less the 1%. The 1% is what makes those working in finance so rich.

I have checked around and I have been unable to find a comparison of the different funds invested in Irish property and a further comparison of them with the JLL property index.

Brendan
 
This is amazing.

The fund before the management charge
1678350167611-png.7305

The effect of a 0.75% management charge

1678356134826.png
 
Hi Brendan,

Your request find a comparison of different funds invested in Irish property can be somewhat achieved by utilising the resource I provided.

Liam
 
I had seen that already, but it covers 5 years and most seem to be either global property or unspecified.

Brendan
 
Well between Brendan's chart in post 32 showing a cumulative return of approx. 2,000% and Itchy in post 33 showing Irish Life Property Portfolio Y with a 0.42% return over 5 years, you can colour me confused.

And no doubt colour investment managers in gold.
 
Those graphs above in Brendan's post #32 tell how regular the blocks on withdrawal have been, they only block when the price goes down - 2008 was the first 2020 the second and 2023 the third. No blocks between 1986 and 2008.

The blocks have not been regular (once in 34 years between 1986 and Jan 2020) however in future I'd expect them to be be regular, and more like the last 10 years than the one off years between 1986-2008.

Regardless of how long term my investing horizon is I'm not going to invest in a fund that needs to block withdrawals every time there's a an Irish commercial property downturn. There's plenty of other options where this will never happen.
 
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