Dixon Advisory has slashed the value of its US property fund by 30%, in yet another blow to the wealth management firm.
The responsible entity for the US Masters Residential Property Fund (URF), Walsh & Company, blamed general weakness in the New York housing market for the disappointing performance.
"The fund's most significant valuation decreases are consistent with results being reporting in similar markets," the market update report said.
Recent falls in the US dollar against the Australian dollar was also blamed for the devaluation to the portfolio, while higher end properties were hit with regulatory changes which had a greater impact on high value properties and individuals.
"Based on preliminary results for the fund's portfolio, assets below US$1 million are expected to experience minimal change to their aggregate values, while assets above US$3 million are expected to experience the largest adjustments," the report said.
"The fund's management team acknowledges that the current market conditions and preliminary valuation results are disappointing. However, the property valuations have no operational impact on the fund, including on its borrowing facilities or forecast net operating income."
URF owns around 670 properties on the US east coast, totaling around $961 million with the majority of its property portfolio in the US$2 million to US$3 million range.
The new management team, appointed in August last year, said it is making good progress on progressing the funds strategic goals as it works towards reducing leverage, maximising operation income, completing the renovation pipeline and rebalancing the portfolio.
"The management team reiterates its view that residential real estate in the Greater New York region remains an attractive asset class for long-term investors," the report said.