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Property funds, another flop. Poste evaluating an intervention for those who lost 25%

27 December, La Repubblica

Another day of losses at the Stock Exchange for four property funds. In comparison with the Irs disaster – Invest Real Security one year ago -, this time is better. In two cases, it wasn’t bad at all. Despite the good results of these products, the funds, now arrived at the end of their duration – for whose settlement we’ll have to wait a couple of months – are quite a disappointment, and they haven’t been understandably very popular in the past few years.

This time also, there is a common element with Invest Real Security (that at the time closed with a loss of 60%): the worst-performing fund of the group, Europa Immobiliare 1 (Vegagest) was mainly distributed by Poste Italiane in 2004, with Massimo Sarmi as Ceo at the time: the instruments were placed on the counter to be perceived as “safe” by customers since people normally associate the post office with reliability. Well, this fund will be completely liquidated in a few months and, according to the estimations that must be confirmed by the fund manager (properties sold in the last weeks, the liquidity of the fund, the closure fees and commissions), Europa Immobiliare is expected to close with a loss around one quarter of its value. The company itself stated that the returns should be comprised between -2.89% and -2.68% yearly.

Another poor performance by Poste Italiane. Matteo Del Fante, just like his predecessor Francesco Caio, seems intentioned in finding a solution for the investors, but it’s still too early to do something since we must wait till the settlement to have the definitive figures. It’s unlikely, however, that also in this case Poste Italiane will come to investors’ aid. Moreover, the company is preparing to deal with the Obelisco case (Investire Immobiliare), another fund allocated by Poste and currently with an exposure of 80%.

Losses, even if in a lighter form, for Delta Immobiliare (Dea Capital real estate), allocated in 2006. In comparison with the minimum points of 23 euro per stock (in 2012), the value recovery at the end of the fund’s duration (85) has been amazing but not sufficient to avoid closing with an exposure in the financial statement for those who subscribed to the fund at the moment of listing on the Stock Exchange. In this case, one of the factors for the bad results has been the specialization of the fund, namely touristic properties, that have been badly impacted by the recession, along with the drop of value of the properties (a common element to all the four funds). The choice of diversifying with a cinema has slightly improved the situation. Whereas the other fund managed by Dea Capital – Beta – and the fund Tecla from Prelios have registered good performances. In both cases, the funds since the listing in 2004 have registered earnings over 40%. But they suffer from the same weaknesses common to all funds: the little liquidity, the necessity to sell the assets at the end of the duration with the consequent risk of being exposed to the risk of selling out, the potential interest conflicts during the initial phase of the input of the properties. It’s not by chance that the Beta fund has sold the last properties cutting dramatically the price: the last four assets have been sold with a discount of approximately 35% compared to the book value on 30th June, while the sale of the property in Latina has been concluded at a price 40% lower than the one estimated six months ago. Siiq haven’t had much more success so far either, being the only alternative to list real estate assets without using funds.

Source: La Repubblica

Translator: Cristina Ambrosi

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