Darwin Leisure Property Fund - Redemption deferral provisions

Who is deemed to be a shareholder in the fund?

Shareholders are deemed to be the legal and beneficial owner of the assets; either direct investors or the insurance bond providers.

 

Why are only Exit share class E, F, G and I affected?

This is because those are the share classes that have surrender requests of greater than 5% for trading date 1st May (our figures show extraordinary outflows of between 6.06% and 7.3% of the respective share classes).

 

Is this allowed by the fund prospectus?

Yes, page 43 of prospectus reads:

In particular the Manager may defer redemptions of Units if, on any Dealing Day, the value of Units to be redeemed (including those for which redemption has already been deferred) exceeds 5% of the total value of Units in issue. Upon exercising its power to defer, the Manager will determine the value of Units which it can redeem without prejudicing the interests of the Fund or the interests of continuing Unitholders and will then effect such redemptions on a pro rata basis, except that the Manager shall give priority to Unitholders whose redemption requests have already been deferred, in date order that such redemption requests would otherwise have been effected. The Manager will then notify the remaining affected Unitholders not later than seven Business Days after the relevant Dealing Day of the number of their Units in respect of which it proposes to defer redemption. A Unitholder who is notified of a deferral may withdraw his redemption request (in whole or in part) by request in writing submitted within seven Business Days of such notice. Redemptions will be deferred until the next Dealing Day where the procedures may be repeated, provided that a request for redemption may not be deferred for more than one year from the original redemption request. Payment will be at the Unit price calculated for the Dealing Day on which the Units are actually redeemed, less any applicable Redemption Charge.

 

Do you expect May’s redemption figures to be repeated?

The redemption figures for 1st June have now closed and indicate redemptions returning to much more usual levels, at a small fraction (circa 1/5th) of May’s redemption requests. The combination of May and June redemptions, even after a part payment is made, is likely to leave the need for continued prudent cash management and part deferrals in June. Darwin will review each month the level of payments to be made with the aim of getting back to a normal process as quickly as possible.

 

Is the Fund NAV suspended ?

Definitely not – the Darwin Board have simply followed good business practice and the rules allowed by the prospectus to prudently manage the positive but reduced cash flow, by staging payment of redemptions on monies surrendered for 1st May dealing, where redemptions breached 5% of that unit class AUM.

 

Will the extra ordinary redemption monies be replaced?

With the fund having been soft closed for over 4 years there is a significant built up of demand, both from institutions and in the retail space, for Darwin units, as investors choose to reduce their exposure to equities and bonds. A controlled reopening for new, as opposed to replacement of units, on a matched basis will facilitate this built up demand being met and redemption monies replaced.

 

How will Darwin know when to reopen parks?

Darwin are in communication with the government at the highest level , to ensure they will be fully prepared to reopen the parks at the first prudent opportunity.

 

What is the outlook for lodge holidays in the UK?

There is a strong indication that there is little appetite for international travel in the near term nor the infrastructure to support it. Staycations are definitely top of most British holidaymakers list and lodges lend themselves perfectly to families mixing exclusively with their own loved ones.  

 

Is it possible to cancel existing requests for redemptions?

Most definitely, as detailed in the attached letter: “Should an investor not wish to proceed with their redemption they may of course cancel the request. Cancelations should be communicated to the Fund Administrator, Vistra Fund Services (Guernsey) Limited, by the business day prior to the Dealing Day or within seven business days of receipt of a contract note”.