Aberdeen Investments is seeking investor approval to combine the abrdn Real Estate Fund (aREF) and the abrdn Real Estate Feeder Fund with the abrdn Global Real Estate Fund (GREF), creating a flagship global hybrid real estate fund with over £700million in assets.
The transaction is expected to complete in November 2026, subject to investor approval. The proposal follows a review of Aberdeen’s real estate fund range and is designed to simplify the fund offering while bringing together assets into a larger, more diversified vehicle.
Upon completion, investors would gain access to a high-conviction, research-led global real estate portfolio, combining direct property investments in the UK and international markets with a diversified allocation to global listed real estate securities, including REITs and listed property companies.
The enhanced portfolio would broaden investors’ direct real estate exposure beyond the UK, providing access to a wider opportunity set across global real estate markets while maintaining Aberdeen’s active, research-driven investment approach.
Aberdeen believes a larger combined fund would offer investors the benefits of greater diversification, increased scale and enhanced flexibility in managing liquidity, while maintaining exposure to the long-term opportunities available across global real estate markets.
Anne Breen, Global Head of Real Estate at Aberdeen Investments, said:
“Real estate remains an important part of investors’ portfolios, but the way investors want to access the asset class continues to evolve. Over recent years we have taken significant steps to modernise our range, combining the long-term benefits of direct property ownership with the flexibility offered by more liquid real estate investments.
“We believe bringing these funds together is the natural next step in that evolution. A larger, more diversified strategy would provide investors with access to a broader opportunity set across global property markets, while creating a more streamlined and scalable platform from which to target long-term growth and income.”
Notice periods
The merger comes as the FCA has stated that it will consult on a framework for notice periods and other liquidity restrictions for funds with substantial direct real estate exposure. The current transition underway across the Global Real Estate Fund targeting a 45% direct / 45% indirect / 10% cash portfolio composition appears consistent with the FCA’s direction of travel.
While it is for the FCA to determine the final framework following consultation, we believe measures that seek to align fund liquidity more closely with the characteristics of the underlying assets can benefit investors meanwhile.
This follows the FCA consultation paper 20/15 in 2020, which proposed notice periods (either 90 or 180 days) on open-ended, daily traded funds that invest over 50% of their assets in direct real estate. Some time has elapsed since the original consultation, and indeed the FCA feedback statement in 2021.
Euan Anderson, Investment Director, Real Estate at Aberdeen Investments, said:
“We welcome the FCA’s focus on ensuring that fund liquidity arrangements remain aligned with the underlying assets held on behalf of investors. The industry has evolved significantly in recent years, and Aberdeen has been taking proactive steps to adapt, including transitioning our real estate funds towards hybrid structures that combine direct real estate with more liquid investments.
“We believe that greater scale, diversification and liquidity management flexibility will be increasingly important going forward, which is reflected in our proposal to combine the abrdn Real Estate Fund and abrdn Global Real Estate Fund into a single flagship solution. Bringing these strategies together would create a broader global property portfolio and allow us to focus our resources on delivering the best possible outcomes for investors. We look forward to engaging constructively with the FCA during any future consultation.”
Recent consolidation history
The proposal follows changes introduced in 2024 which repositioned the former abrdn UK Real Estate Fund as a hybrid strategy, combining direct property holdings with global indirect real estate investments. The current proposal would further simplify the range by bringing together two funds that already share similar investment objectives, portfolio structures and risk profiles.
If approved, investors in the abrdn Real Estate Fund would receive equivalent holdings in the abrdn Global Real Estate Fund. Aberdeen expects ongoing charges for investors to remain unchanged or be slightly lower following completion of the transaction.
Investors will be asked to vote on the proposal, with completion currently expected in November 2026, subject to the necessary approvals.
