Invesco Ltd. reduced management fees by 20% for its Invesco Core Real Estate—USA fund (ICRE) as the $12.7 billion open-ended fund grapples with a $2.2 billion redemption backlog. The fee cut, alongside an upcoming tender offer, aims to address an elevated withdrawal queue that has persisted amid uneven recovery in U.S. real estate markets.
The fund, which targets income-producing properties for institutional investors such as public pensions, has historically allowed periodic exits but has restricted withdrawals due to strained liquidity. Since 2022, average annual redemption payments have reached 5.3% of the fund’s net asset value, up from a long-term average of 3.5%, reflecting intensified investor demand to exit positions.
Invesco’s shares fell 1.3% in Thursday trading following the announcement. The firm’s strategy includes a tender offer to facilitate redemptions at a discount, though the fund’s structure limits full payouts. Some property investors have benefited from rising returns driven by AI-driven demand for data center assets, even as broader commercial real estate faces valuation pressures from high acquisition costs.
