Redemptions and subscriptions related to OP Fund Management Company's special common funds investing in real estate have been temporarily suspended to protect the interests of unitholders. Our customers have asked us to adjust our management fees accordingly. In response, we have decided to halve our management fees for the time being.

Management fees charged for special common funds managed by OP-Public Services Real Estate and OP-Rental Yield will be reduced by half from 1 January 2025. The annual management fee for both special common funds will decrease to 0.95 per cent, compared to the previous 1.9 per cent. Only half of the management fee will be charged for as long as mutual fund orders remain temporarily suspended. The halving of management fees applies to all unit classes in the funds.

Redemptions and subscriptions for special common funds managed by OP-Public Services Real Estate and OP-Rental Yield were suspended on 31 December 2024, to protect the interests of unitholders. Without the suspension, redemption orders made during 1 July–31 December 2024 would have become due for settlement in July 2025.

“The decision to suspend redemptions temporarily was taken to protect the interests of unitholders in our exceptional market conditions. However, I understand that it has caused concern and anxiety. Our customers have expressed the wish for an adjustment in the management fees charged for OP Fund Management Company's real estate funds, and we have decided to halve the fees,” says Juha Takala, CEO of OP Fund Management Company.

Juha points out that – as for all funds – decisions on special common funds investing in real estate are taken in the best interests of all unitholders, in all circumstances. Real estate funds offer customers the opportunity to make diversified investments in real estate assets. Even in normal circumstances, assets of this kind take significantly longer to sell than shares, for example.

“The key issue is to make long-term investments that are diversified across time, geographies and asset classes,” adds Takala.

The suspension is about protecting the interests of unitholders

The exceptional situation on the property markets is the reason behind the temporary suspension of redemptions and subscriptions related to OP-Public Services Real Estate's and OP-Rental Yield's special common funds. Towards the end of 2024, it became increasingly clear that large amounts of real estate could not, in the current situation, be sold in a way that protects the interests of unitholders while acquiring sufficient cash to pay for redemptions.

Despite the temporary suspension of subscriptions and redemptions for the funds, professional management of their portfolios will continue normally. Most of the funds' real estate assets are rented and their rental income has remained at a good level. Management and rental of the real estate – and net asset value calculation, risk management, reporting and accounting for the funds – will also continue normally during the temporary suspension.

“The suspension of redemptions and subscriptions is temporary, and we are closely monitoring the market situation. We aim to reopen the funds for subscriptions and redemptions as soon as the real estate market stabilises,” says Takala.

If a client placed a redemption order between 1 January and 30 June 2024, the redemption will have been confirmed at the fund's net asset value calculated on 31 December 2024, and settled with the client in January 2025, in accordance with the fund rules.

On the other hand, if a client made a redemption order between 1 July and 31 December 2024, its confirmation date will be postponed to the first day of net asset value calculation following the reopening of the fund, in accordance with the fund rules. This means that the client will receive payment for the redemption after the reopening of the fund, in accordance with the fund rules.