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Principal US Real Estate seperate fund
Old 12-13-2008, 09:24 PM   #1
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Principal US Real Estate seperate fund

Anyone else stuck with this mess? Value of my investment in this commercial real estate ownership fund has dropped about 20% and we can't touch the money short of death. Since 09/25/08 the fund has been locked down to any redemptions due to liquidity problems unless you die. Don't want to sell buildings at a loss they say and not enough cash to support any redemptions so I just sit on the sidelines and watch it crash. I've been in the redemption queue since 09/29/08 with no word on the status other than no cash to meet redemptions......what a mess!
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Old 12-14-2008, 09:32 AM   #2
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Ick. That's one reason why I've started to prefer ETFs over traditional mutual funds.
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Old 12-14-2008, 09:41 AM   #3
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Originally Posted by MovingtotheCove View Post
Anyone else stuck with this mess? Value of my investment in this commercial real estate ownership fund has dropped about 20% and we can't touch the money short of death. Since 09/25/08 the fund has been locked down to any redemptions due to liquidity problems unless you die. Don't want to sell buildings at a loss they say and not enough cash to support any redemptions so I just sit on the sidelines and watch it crash. I've been in the redemption queue since 09/29/08 with no word on the status other than no cash to meet redemptions......what a mess!

Unless you've only owned this fund for a year you should be very happy about the performance of this fund.

It is a very unique fund, and people never seemed to complain when the volatility was a small fraction of REIT funds.
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Old 12-14-2008, 01:08 PM   #4
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Unless you've only owned this fund for a year you should be very happy about the performance of this fund.

It is a very unique fund, and people never seemed to complain when the volatility was a small fraction of REIT funds.
Even so, regardless of its performance I think I'd feel a right to complain if they "locked" my money for months so I couldn't redeem my shares.
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Long horizon...
Old 12-14-2008, 07:01 PM   #5
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Long horizon...

Yes, I've owned the fund for a long time and had great performance...not doubt with limited volatility as you suggested. Just a feeling of being helpless to have it locked up now while liquidity is managed in a black box.
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Old 12-14-2008, 10:09 PM   #6
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Even so, regardless of its performance I think I'd feel a right to complain if they "locked" my money for months so I couldn't redeem my shares.
That might be part of how they achieve good performance. Certain things a manger cannot do if people can cut and run whenever they get scared.

Ha
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Old 12-15-2008, 12:11 AM   #7
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Yes, I've owned the fund for a long time and had great performance...not doubt with limited volatility as you suggested. Just a feeling of being helpless to have it locked up now while liquidity is managed in a black box.

For those who don't know, this is basically the only fund of it's type. They actually buy properties as opposed RE securities. When they get large redemptions they actually have to go sell buildings.

I agree that it sucks to be locked up, but it's better for the long term shareholders. I think they should have made it part of the funds charter that they limit redemptions to 2% a quarter or something similar instead of waiting for a run to do it.
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