Managed Funds - Amending A Fund´s Constitution In The Current Economic Climate

Key Points:
In efforts to maintain long-term sustainability of some managed funds, various responsible entities have, and continue to, suspend redemption requests, which may require amending the fund's constitution. When seeking to amend a fund's constitution in such a scenario, responsible entities need to consider the guiding principles in ING Funds Management Ltd v ANZ Nominees.

In the current economic climate a combination of factors have left some managed funds with limited cash resources to fund redemption requests, while at the same time facing increasing redemption requests from their members.

This issue has forced some responsible entities (REs) to consider suspending redemption requests to maintain the long-term sustainability of their fund. In doing so, REs must consider balancing the interests of members wishing to redeem and the interests of the remaining investors. This concern is driven by the fundamental obligation of a RE to act in the