Worsening financial problems at privately-owned property company Dawnay, Day Group have caused shares in three Aim property funds, which share its name, to plunge in value.
The three funds - Dawnay, Day Sirius, Dawnay, Day Carpathian, and Dawnay, Day Treveria - are separate legal entities from the group, which today appointed Ernst & Young as administrator following a failed re-financing. This caused shares of all three funds to tumble as investors panicked about the possibility of forced asset sales.
On Friday, the group was forced to sell its 20 per cent stake in F&C Asset Management at an £80m loss after breaching financial covenants. Today, the group's founders Peter Klimt and Guy Naggar raised €3m by selling contracts for difference on shares they own in German retail fund Treveria, which fell 16 per cent to €0.28 in morning trading. Treveria's shares have shed 75 per cent of their value in the last year. A yawning 60 per cent discount to the net asset value (NAV) led to , but a buyer has yet to be found.
Dawnay, Day Sirius, which invests in flexible commercial workspace in Germany, said in a statement today that it was a 'separate legal entity' from the group, and holds direct title to its property assets. Despite the reassurances, the shares fell 6 per cent to €0.45.
Dawnay, Day Carpathian, which invests in central and eastern European retail, issued a similar statement, and took the further step of setting up a new company to act as its investment adviser. The shares fell 5 per cent to 34p (€0.42).
The two funds are expected to rebrand and drop the Dawnay Day label in the near future.
