Key Takeaways
- • Canada Life Assurance Company suspended contributions, transfers, and redemptions across four Canadian real estate investment funds effective March 20, 2020, citing COVID-19's impact on property valuations and market liquidity.
- • The suspension affects the Great-West Life Canadian Real Estate Investment Fund No. 1, London Life Real Estate Fund 2.17G, London Life Real Estate Fund 5.191G, and Canada Life Real Estate Fund (GWLRA) SF353, which collectively hold diversified real estate exposure across office, retail, industrial, and multi-family residential properties in Canada.
- • The company stated the suspension will preserve liquidity and protect its ability to honor redemptions once market conditions stabilize, with no defined end date communicated at announcement.
- • Canada Life committed to establishing a process for hardship withdrawals and other distributions, including minimum RRIF payments, to address urgent investor liquidity needs during the suspension period.
Summary
Canada Life Assurance Company, the Winnipeg-based insurance and wealth management provider, temporarily suspended all contributions, transfers, and redemptions for its Canadian real estate investment funds on March 20, 2020. The suspension was triggered by severe market disruptions caused by the COVID-19 pandemic, which rendered the company unable to price fund units at values that accurately reflect underlying real estate holdings.
The suspension encompasses four funds: the Great-West Life Canadian Real Estate Investment Fund No. 1, London Life Real Estate Fund 2.17G, London Life Real Estate Fund 5.191G, and Canada Life Real Estate Fund (GWLRA) SF353. The latter two funds hold interests in the first two, creating a layered structure. Collectively, these funds maintain exposure to office, retail, industrial, and multi-family residential properties across Canada. The F-series funds are primarily held by third-party advisors for their clients, alongside some direct-to-investor holdings.
In its announcement, Canada Life emphasized that preserving the current liquidity position through the suspension would protect the company's ability to satisfy redemptions once the suspension is lifted. The company did not provide a timeline for lifting restrictions, instead indicating the suspension would remain in effect "until market conditions have stabilized." This open-ended approach reflects the unprecedented uncertainty in real estate markets during the initial pandemic shock.
Recognizing the hardship potential for investors, Canada Life announced plans to establish a process permitting hardship withdrawals and other distributions, including minimum RRIF (Registered Retirement Income Fund) payments, during the suspension period. This measure balances liquidity preservation with investor access to critical retirement income obligations and emergency funds.
The suspension encompasses four funds: the Great-West Life Canadian Real Estate Investment Fund No. 1, London Life Real Estate Fund 2.17G, London Life Real Estate Fund 5.191G, and Canada Life Real Estate Fund (GWLRA) SF353. The latter two funds hold interests in the first two, creating a layered structure. Collectively, these funds maintain exposure to office, retail, industrial, and multi-family residential properties across Canada. The F-series funds are primarily held by third-party advisors for their clients, alongside some direct-to-investor holdings.
In its announcement, Canada Life emphasized that preserving the current liquidity position through the suspension would protect the company's ability to satisfy redemptions once the suspension is lifted. The company did not provide a timeline for lifting restrictions, instead indicating the suspension would remain in effect "until market conditions have stabilized." This open-ended approach reflects the unprecedented uncertainty in real estate markets during the initial pandemic shock.
Recognizing the hardship potential for investors, Canada Life announced plans to establish a process permitting hardship withdrawals and other distributions, including minimum RRIF (Registered Retirement Income Fund) payments, during the suspension period. This measure balances liquidity preservation with investor access to critical retirement income obligations and emergency funds.
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