UBS Takes Charge: $2 Billion Credit Suisse Real Estate Fund Liquidation Unveiled

Summary:

UBS has put a $2 billion Credit Suisse real estate fund into liquidation.
The fund's value has dropped significantly in 2023.
36% of the fund's total units were redeemed by the end of 2023.
UBS warns that selling assets now could negatively impact remaining investors.

UBS's Bold Move on Credit Suisse's Real Estate Fund

ZURICH (Reuters) - UBS has initiated an "orderly liquidation" of a real estate fund from its former rival, Credit Suisse, valued at over $2 billion. This decision marks a significant step as UBS manages the fallout from its acquisition of Credit Suisse amidst financial turbulence.

As of the end of June, the Credit Suisse Real Estate Fund International had net assets totaling 1.88 billion Swiss francs (approximately $2.17 billion). The fund's value has notably declined throughout 2023, prompting UBS's action.

The Details Behind the Liquidation

UBS acquired Credit Suisse earlier this year following a series of financial setbacks that led to its competitor's collapse. The bank reported that by the end of 2023, 36% of the fund's total units in circulation from 2022 had been redeemed.

In a statement, UBS Fund Management (Switzerland) noted that the liquidation process has revealed the limited depth of the real estate markets. To satisfy the remaining 2023 redemptions, UBS would need to sell the portfolio's most liquid assets at a poorly timed moment in the real estate market, potentially harming existing investors and diminishing the portfolio's attractiveness, which could lead to further redemptions.