08 April 2020

Cromwell Funds Management COVID-19 Asset Valuations Update

COVID-19 continues to be an unprecedented global event and Cromwell recognises the urgent nature of the emergency, our responsibility to help ‘flatten the curve’ and contribute to the ensuing recovery in all the countries, cities and communities in which we operate.

Cromwell CEO, Paul Weightman, has stated, “We are conscious that we have a wide range of stakeholders including employees, securityholders, tenants, suppliers, contractors and service providers impacted by COVID-19.”

“We will act in a responsible way that balances the interests of all stakeholders and to ensure that the impact of the pandemic is not borne unfairly by any one particular group,” he added.

Cromwell Funds Management Unlisted Property Funds

Cromwell Funds Management (CFM) understands that many investors are concerned about the impact the COVID-19 crisis might have on their investment balance in one of CFM’s unlisted property funds.

Unlike listed markets which provide transparent, albeit often volatile pricing, assessing the valuation of unlisted assets is more difficult at a time when there is little transactional activity to allow for the benchmarking, and then valuing, of an asset. It is clear, however, that property and other asset types have been adversely affected by the crisis.

CFM has a fiduciary duty to ensure that all investors in the funds, those applying for new units and those redeeming their units are treated equitably.

CFM has therefore quantified the valuation impact on a tenant by tenant basis based off current information. As a result, the valuations of directly held property assets within the Cromwell Direct Property Fund, Cromwell Riverpark Trust, Cromwell Ipswich City Heart Trust and Cromwell Property Trust 12 have been devalued by 5.9%, 1.4%, 2.4% and 1.6% respectively.

The revaluations have now been included in each Fund’s unit pricing and are consistent with many superannuation funds   and unlisted property fund managers who have reduced valuations of unlisted property and infrastructure assets in a range of 7% to 10%.

Based on information currently available there is no change to forecast distributions across the Funds and the Cromwell Direct Property Fund remains open for investment.

CFM will continue to monitor the property investment market closely to ensure the pricing of our unlisted assets remains appropriate and that all investors are treated equitably.

If you have any questions or would like to speak to someone about your investment, please contact Cromwell’s Investor Services Team on 1300 268 078 or email invest@cromwell.com.au.