Mandatum AM AIFM Ltd does not currently consider principal adverse impacts ("PAI") of its investment decisions in accordance with Article 4 of the SFDR* as the availability of the data on the investment objects is not yet in an adequate level for the purposes of publishing a full PAI statement. Mandatum AM AIFM Ltd will assess its position annually and is evaluating the ability to develop its process concerning consideration of PAI.

*Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector

Special investment fund Mandatum AM Finland Properties II is temporarily suspending redemptions and subscriptions of fund units

Mandatum AM AIFM Ltd has decided to temporarily suspend redemptions and subscriptions of fund units in the Special investment fund Mandatum AM Finland Properties II (Fund). The interruption is based on a decision made by the company’s Board of Directors on 23 January 2024. 

On 3 October 2023, Mandatum AM AIFM Ltd announced that it is postponing the payment of redemptions linked to the September 2023 redemption date in accordance with the Fund’s rules. As a consequence of the nearly unprecedented slowing down of the property transaction market, it has not been possible for the Fund to sell properties at a sensible price and thus acquire sufficient cash assets to pay out redemptions.

According to KTI Finland, which produces information on the real estate market, the property market’s transaction volume in 2023 was 64 per cent lower than in the preceding year, totalling roughly EUR 2.6 billion¹. The significant slowing down of the property market’s transactions can be attributed to the rapid spike in the interest rate level and difficulties in the availability of financing. The market’s transaction volume in 2023 was similar to the years after the 2008 financial crisis, when the size of the transaction market was also significantly smaller than it is now. In a quiet market, there are fewer buyers and transaction processes take longer. 

Portfolio management has used the means available for managing liquidity. In the current situation, the Fund cannot accept redemption or subscription orders until market activity has sufficiently returned to normal. In Mandatum AM AIFM Ltd’s view, it is in the interests of the fund unit holders to temporarily suspend redemptions and subscriptions. 

Despite the exceptionally challenging liquidity situation, the fundamentals of the Fund’s real estate portfolio are in order

The strategy, which leans on a strong cash flow, has proven to be a defensive element against changes in return requirements and rising interest expenses. The real estate portfolio’s net return in relation to market values at the turn of the year is 8.7% (so-called initial return). The Fund’s economic occupancy rate is historically high. The rental market and new leasing are at a good level, and rents are being raised in line with the indices. The Fund’s moderate loan-to-value ratio has been ensured through a long-term financing agreement. Most of the debt in use has been hedged. 

Mandatum AM AIFM Ltd continuously assesses the means available for increasing cash assets. Mandatum AM AIFM Ltd continuously monitors the continuation of the grounds for temporarily interrupting redemptions and subscriptions. The temporary suspension of redemptions and subscriptions will continue for as long as there are grounds for it. The temporary suspension of redemptions and subscriptions does not require any actions from the fund unit holders.

Additional information:

For more information, please send an email to fundservices@mandatumam.com. 

¹ KTI Finland: Vuoden 2023 kiinteistökauppavolyymi jäi 2,6 miljardiin euroon (https://kti.fi/vuoden-2023-kiinteistokauppavolyymi-jai-26-miljardiin-euroon)

Risk is always inherent in investments. More detailed risk descriptions are available in the Fund’s product material found from this webpage.

Past performance does not predict future returns. Investing includes risks and investors should familiarize themselves with the Fund documentation and read the full risk descriptions of the Fund.

Special Investment Fund Mandatum AM Finland Properties II rules and other documents are being updated. The updates will enter into effect on 19.12.2023. The new documents are presented as links below this publication.

• KID
• Subscription Form
• Fund rules 
• Regulatory disclosures 
• Sustainability related disclosure 
• Summary of Investor Rights
• MAM-SFDR website disclosure Finland Properties II

• Mandatum AM Growth Equity II Sustainability-related disclosure

Product disclosure for financial products that promote environmental and social characteristic

• Summary: Product disclosure for financial products that promote environmental and social characteristic
• Mandatum AM AIFM Ltd. sustainability-related disclosures