Real Estate Fund Update

Great-West Life and the real estate fund manager, GWL Realty Advisors Inc., are working to lift the temporary suspension on withdrawals and transfers from the fund, which was effective Dec. 15, 2008.

The economic environment in the latter part of 2008 was extraordinary and created higher than normal withdrawal requests. There was not enough cash in the real estate fund to meet these requests and therefore the temporary suspension was put in place.

The fund manager is actively managing the fund and working to increase the cash available for withdrawals and transfers from the fund. The timing of when the suspension is lifted will depend on how quickly the fund manager can increase the cash available in the fund.

Working to Increase Cash in the Fund

The primary way to increase cash is to sell real estate held in the fund. However, real estate takes many months to buy and sell — longer in this challenging economic environment.

To be fair to all unitholders, the fund manager must sell properties at market values that are both appropriate and fair. A number of selected properties have been sold with other properties yet to sell.

The fund manager’s disciplined approach to increasing cash helps maintain the value of the fund for all unitholders — both those who plan to withdraw or transfer, and those who wish to remain invested.

Steps Towards Lifting the Suspension

Once we believe the fund has enough cash, we will notify unitholders they can submit redemption requests.

Here is one approach we are considering:

• We would provide notice that we are taking withdrawal and transfer requests during a stated period of time.
• If the total amount of requests received is more than the cash available to be paid out, everyone would receive a proportionate amount of their request, subject to the rules in place at that time.
• This kind of process would be repeated until the temporary suspension is lifted.

The temporary suspension remains in place until the fund is once again in a position to process requests for withdrawals and transfers on a daily basis.

A Sound Investment

Great-West Life has managed real estate segregated funds for nearly 3 decades, and has managed through previous recessions when the cash position of the fund also experienced challenges.

The real estate fund and its fund manager, GWL Realty Advisors, have a long history of consistent and strong returns. GWL Realty Advisors is one of Canada’s largest real estate advisory firms with about $12 billion of assets under management for some of Canada’s largest institutional and pension fund real estate investors. It manages more than 340 properties in Canada.

Over the long term, the Great-West Life Real Estate Fund returns have historically been stable and positive. The real estate fund remains a sound and appropriate investment for those with a long-term investment time horizon who don’t need cash in the short term.

For more information about the real estate fund and the temporary suspension, please contact your financial security advisor.