Credit Suisse liquidating CHF 300 million Commercial Real Estate Fund Global due to disagio, discount to NAV, illiquidity – Overleveraged Fund pulled

Credit Suisse is liquidating a Real Estate Fund (REF) (CS REF Global, Valoren-Nr. 13985167) by moving the assets (~CHF 300m?) to another of their funds (~CHF 2.1bn, CS REF International, Valoren-Nr. 1968511), paying out current investors in the discounted fund and selling the properties to another, own REF at a price above what the market would currently pay, it seems. You could argue: if the market were willing to pay for commercial properties, Credit Suisse could just sell the properties on the open market instead of moving the properties around inside of their own funds, moving it to a bigger more well diversified fund. This reminds me a lot of 2007 to be honest, when liquidity dried up first in the least diversified, highest leveraged players.

What was in the fund that is being liquidated?

Commercial ProjectsBaujahrMarktwert in CHF Mio.Total Mietfläche m2
J4, Tokyo, Japan201269.52’724
Karlshöfe, München, Deutschland200570.711’531
26 Whitehall Road, Leeds, England200842.111’302
Port-City III, Rotterdam, Niederlande2011186’918
Top 4 are 2/3 of the fund!200.332’475

I am not sure how usual or sensible this actually is. Not allowing a market to realise an asset is undervalued and let time take its course seems somewhat contrary to the principle of exchange listed funds. If you can explain why this is happening, I am personally interested. Possible additional reasons to openly given ones are sure to be interesting.

Here the quote from Credit Suisse website:

„The Credit Suisse Real Estate Fund Global (CS REF Global, valor no. 13985167) investment fund invested in quality commercial properties situated in attractive locations in the Americas, Asia-Pacific, and in Europe (excluding Switzerland). The fund management company initiated the liquidation of the Credit Suisse Real Estate Fund Global on November 30, 2020. Trading in the fund units on the SIX Swiss Exchange has been suspended with immediate effect, and the units are being delisted.“

Disagio for Credit Suisse Real Estate Fund Global has been ongoing since at least 2017!

Credit Suisse Real Estate Fund Global was leveraged – ~25-30%

On the topic of Leeds Commercial Property Market

COLLIERS’ VIEW: Although supply remains limited, we expect a marginal decline in office rents this year, followed by a more substantial fall in 2021. On the economy: Despite positive Q3 figures, there is a high risk of negative Q4 figures, as renewed lockdown measures force non-essential shops to close once more. The speed of the recovery in 2021 depends on the outcome of Brexit negotiations, Covid developments and the Government’s commitment to protect and support businesses and employees.(November 2020)

This was one year ago: „The Leeds office development pipeline is extremely positive with four major developments on the horizon. The speculative development of 11 and 12 Wellington Place will deliver a total of 245,000 sq ft, with practical completion expected in Q4 2021. Mclaren Property were granted detailed planning permission for a 330,000 sq ft office development on Wellington Street in January 2020 and both Vastint and CEG are accellerating plans on Southbank sites. Phase 1 of the CEG scheme will deliver 38,000 sq ft of offices and targets completion in Q1 2021, whilst the first phase of the Vastint scheme is progressing detailed planning permission, aiming to be on site later in 2020.“ source: Colliers

What is interesting about this winding down, liquidating the Credit Suisse REF Global: In 2015, when the volume was highest, and the price was high, individual investors were being recommended to buy. People were being told to increase the property quota in their portfolio. Also note the often cited diversification effect disappears, even turns to positive correlation with assets like equities in a global financial or economic crisis, event.

Questions or feedback?

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Charts: source SIX Swiss Exchange.

07.12.2020: Edit

Credit Suisse Hospitality Real Estate Fund Performance similiar to recently delisted Global REF – Financial Markets Blog (

Original news in german:

Der Handel von Fondsanteilen an der Schweizer Börse SIX wurde mit sofortiger Wirkung eingestellt und die Anteile werden dekotiert, wie die Grossbank am Montag mitteilte. Die Fondsleitung habe beschlossen, den Fonds (CS REF Global, Valoren-Nr. 13985167) unter anderem wegen eines geringen Handelsvolumens und des daraus resultierenden Disagio von über 20 Prozent aufzulösen.

Der Abschlag habe sich aufgrund der Marktkorrekturen gebildet, die Covid-19 weltweit an den Märkten ausgelöst habe. Die Fondsentwicklung stehe im Widerspruch mit der fundamental hohen Qualität des zugrundeliegenden Immobilienportfolios. Es handelt sich laut Mitteilung um zwölf „hochwertige“ Gewerbeimmobilien in Amerika, der Asien-Pazifik-Region und Europa.

Die Liegenschaften werden voraussichtlich im ersten Halbjahr 2021 an den Credit Suisse Real Estate Fund International (CS REF International, Valoren-Nr. 1968511) übertragen, und der Erlös wird an die Anleger ausbezahlt. Der Übertragungswert entspreche dem geschätzten Verkehrswert der einzelnen Liegenschaften.

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