“Contrariwise,' continued Tweedledee, 'if it was so, it might be; and if it were so, it would be; but as it isn't, it ain't. That's logic.”
Through the Looking-Glass, and What Alice Found There, Lewis Carroll, 1871
Welcome to our latest newsletter. John once again featured heavily in social media after his Twitter observation on Brexit went slightly viral:
For the avoidance of doubt, we were referring to John Tenniel's illustration from chapter 4 of the original 1871 edition rather than the Disney film.
Huge congratulations to the winners and others short-listed in the annual Association of Real Estate Funds awards.
In particular, we are delighted that two of our clients did so well in the Investors' Award for Outstanding Achievement. Launched in 2019, this award, open to all AREF Fund Members is judged by a panel of key fund investors looking at the following criteria:
- Environmental & Social Impact; and
- Investor Communication.
Two clients for whom we have undertaken significant work on operational and governance matters featured in this:
UBS Triton Property Fund LP was the winner, for the second consecutive year.
Aberdeen Standard Investments Airport Industrial Property Unit Trust (AIPUT) was one of the two runners up.
Congratulations obviously also to Mayfair Capital who were the other runner-up, despite not being our client, yet. In the immortal words of Meatloaf, "two out of three ain't bad”.
You can find all the details here.
Ammonites, extinction events and the real estate funds industry
As we mentioned in our previous newsletter, this paper was originally produced in the autumn of 2010 as a write-up of a presentation by John Forbes at that year’s PwC European Real Estate Client conference. The conference presentation and the paper reflected upon the regulatory and other pressures facing the real estate industry in the aftermath of the Lehman collapse, as well as providing some predictions as to how this might unfold over the two years to the autumn of 2012. 2008 marked not only the collapse of Lehman, but also the publication of the press pulse extinction theory on which it is based.
We have updated the report twice since then.
To mark the tenth anniversary, we have updated the report again and put it all online on our website. You can find it here.
HMRC ISA consultation
As covered previously, one of the key points in the FCA consultation on open-ended funds (CP 20 15) to which we had already responded is the mismatch between the proposed requirements for funds and the current requirements for ISAs. The FCA had indicated in their consultation that they were discussing this with HMRC. HMRC published their consultation on 28th October. It proposes to allow existing investments in open-ended property funds to remain within the ISA whilst prohibiting the inclusion of ‘new’ investments in such funds. This proposal is woeful.
We responded to the consultation. You can find it here.
We also contributed to the Association of Real Estate Funds (AREF) and Investment Property Forum (IPF) responses.
EU AIFMD consultation
We covered this in our previous newsletter. John is now part of the working group that will be responding on behalf of AREF.
John is chairing an AREF webinar on this on 16th December (Wednesday). You can find details and register here.
If you are not an AREF member, but would like an invitation, let us know.
FCA rules on mini-bonds
We have in the past covered various abuses of mini-bonds and the temporary FCA ban on marketing. This has now been made permanent, High-risk investments: Marketing speculative illiquid securities (including speculative mini-bonds) to retail investors. You can find the details here.
Once again we are spoilt for choice for historic trivia.
With so much coverage in the media that the UK’s current economic position, even before a catastrophic Brexit, is the worst economic downturn since 1709, it was an obvious choice to look at the cause, a catastrophically harsh winter known as The Great Frost. Then the UK Brexit negotiations took a catastrophic turn for the worse. The UK’s chief negotiator will henceforth be referred to as The Not So Great Frost, so we moved swiftly on.
As the UK team floundered, the opportunity arose for fish related humour. We have, however, been completely outclassed by the EU, who served Boris a turbot for his dinner. We initially thought that this was an obvious but superficial fish related jibe. However, it was then pointed out that this might be a very sophisticated reference to Juvenal’s fourth satire in which the corrupt emperor who is surrounded by sycophants is served a turbot. This is trolling of the highest order, particularly if Boris, who rates himself a bit of a classicist, missed the turbot reference. We are impressed.
And then Government sources announced that the Royal Navy would be deployed to fend off French fishing boats. This brought to mind one of the more unusual historical moments, the Dogger Bank incident of 1904 when the Baltic Fleet of the Imperial Russian Navy accidentally attacked British trawlers in the North Sea under the impression that they were Japanese torpedo boats. In the ensuing chaos, Russian ships also started attacking each other. Two British fishermen were killed and six injured, with one trawler sunk and five damaged. On the Russian side, a sailor and a priest were killed on the cruiser Aurora.
England manager Fred Dibbs commented, "as the underdogs, we were delighted to come out with a draw. We are just fishing boats, they've got battle cruisers with international experience."
The Russian fleet carried on round to Japan, where it did manage to find actual Japanese fighting ships. Unfortunately, the Russians lost the subsequent battle.
The Aurora went on to fire the first shot of the Russian October Revolution in November 1917, signalling the start of the attack on the Winter Palace. The ship remains in St Petersburg as a rather splendid tourist attraction, whilst still officially the flagship of the Russian Navy.