Perpetual Says Pace Of Mortgage Fund Redemptions Declining

Post by NeilMc on December 1, 2009 · Under Australian Economy, Business News, Company News, Wealth Management, investments · Comment

Leading Australian asset manager Perpetual says the rush by investors to redeem investments in its mortgage funds significantly declined during the September quarter as investor fear subsided slowing the pace of their conversion into federally backed deposits.

Simultaneously Perpetual said it enabled investors who wanted to redeem their assets, to withdraw the vast majority of funds.

The redemption value during the quarter ending September declined by $100 million compared with the quarter ending June, according to a statement released by Perpetual on Tuesday.

Perpetual currently manages approximately $1.7 billion in mortgage fund assets following a decline from over $2 billion prior to the government enacting a federal guarantee of all deposits in October last year.

“It’s been quite a material decline. The level of income and stability of capital been evident, and that has reassured investors.” Perpetual group executive for income and multi-sector Richard Brandweiner said.

Perpetual says it has been able to honour redemption requests, having paid out 91 cents on the dollar for retail investors demanding their money over the last twelve months and retuning 74 cents on the dollar for wholesale or institutional investors.

In the wake of the Federal Government deposit guarantee, many investors rushed to redeem investments in mortgage funds, preferring to place their investments in safer guaranteed deposits and forcing mortgage fund managers to temporarily freeze redemption’s.

Perpetual says it gradually allowed investors to redeem their investments, switching to a quarterly redemption scheme following the reopening of the fund in November last year.

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