Subscription fees, annual management fees, transaction fees (when properties are bought/sold within the real estate portfolio), and redemption fees are already in use. In addition to these, there is now a potential dilution levy of 0–20%. In a good market environment, the dilution levy is likely 0% or close to it, but how much will it be in a poor market environment, now or in the future? In some scenarios, for example, 5%, and the maximum is indeed 20%.
Based on this information, the recommended investment horizon for someone investing in the fund should probably be at least 7–10 years.
It will be interesting to see how this works in practice. If you place a redemption order, will the customer be given a prior indication of the likely dilution levy percentage (e.g., a range of 3–5%) before the money hits the bank account, allowing them to confirm or cancel the order at the last minute if the levy seems too high from the customer’s perspective this year? Or will the money just appear in the bank account without any prior notification, with the customer having no idea of the levy’s size when placing the redemption order?
A fund investor should receive some kind of advance information. It can’t really be the case that either 100,000 euros or 80,000 euros lands in your bank account, and you only find out which it is when the redemption order can no longer be canceled. Otherwise, four years’ worth of fund returns, for instance, could be wiped out in one go during redemption.