Getting there. Pretty slow for this arbitrage to settle. Not so efficient markets
| ISIN | Bloomberg | NAV | Px | Premium |
|---|---|---|---|---|
| CH0026465366 | DRPF | 14.56 | 19.15 | 31.5% |
| CH0100612339 | STA | 108.89 | 133.5 | 22.6% |
| CH0031069328 | CSLP | 110.39 | 150 | 35.9% |
| CH0118768057 | HOSP | 76.19 | 95 | 24.7% |
| 32.6% |
Why does it need to be weighted ?
Shouldn’t the calculation be as follows -:
Total Current Market cap of all funds / Total NAV of all funds
Btw- was there any announcement on how the exchange ratio will be calculated ?
The announcement will come next year probably. At that point the annoncement will mention that the premiums are similar
True there is no reason to be NAV weighted. It could be market cap weighted as well. At the end of the day, none of that has a meaning for the premium that the new combined fund will trade at. The market will decide.
| NAV weighted | 32.6% |
|---|---|
| Mkt Cap weighted | 32.7% |
There was no announcement. But previous fund mergers specifically said NOT at market cap ratios but instead NAV ratios.
"gestützt auf die Nettoinventarwerte (und nicht Markt oder Börsenkurse) "
I want to invest in Direct Residential Real Estate Funds this year. It should be well diversified in Switzerland and across providers. Which 3-4 funds do you recommend?
From this month’s UBS report
Real estate funds are currently rather overvalued with an average
agio of almost 30%, which is why we do not recommend them
overall at present.
Could you please share the report from UBS?
They are saying their funds are overvalued?
ZKb has another take on this topic
Interesting thanks. They also mention the fund merger. Surprisingly, STA is still 10% cheaper than the rest.
Thanks
It’s interesting because the largest real estate funds actually belong to UBS after the announced merger
So they are in fact saying “do not buy our funds” as they are overvalued ?
It being a closed fund changes a lot here.
They can‘t emit new shares and get more AUM that way.
I see, so in principle they are saying that DRPF & CSLP are trading at very high prices and people should not trade them unless they fall approx. 15% in value.
However at the same time, 3a pension funds use CH0036599816 (UBS Index fund) as vehicle which invests in all of these overvalued Swiss RE funds.
Nice page. Good to read “officially” from UBS re the NAV’s being used for the merger.
Would you all think that NAV premia increase towards year end? The tax benefit of owning direct funds really only applies to owners of the fund on 2 dates. I.e. on the date they pay out the distribution (income tax) and over year end (asset/wealth tax)
Given the low overall liquidity, that seems unlikely?
Fair enough. People are allergic to taxes though. 1000 CHF bill circulation always jumps in Dec to revert back in January as people hold cash (presumably to have a lower bank balance over the year end).
Maybe someone has access to the above NAV premium chart data, then it’d be easy to identify year end effects.
I think that’s just all those envelopes going back and forth at Xmas. I only get around to depositing my Ameislis ** begin Jan, when I have more time again.
**
Since the NAV of those funds are calculated using DCF. And given the recent massive shift down in the yield curve (plus reference rate for rents NOT being lowered), I guess it’s fair to assume that the NAVs will be higher by year end.
