Three of the UK’s biggest asset managers have suspended their UK property funds following a post-Brexit rush to exit the asset class.
On Monday Standard Life Investments (SLI) suspended trading on its £2.9bn UK Real Estate fund, which has a mix of institutional and retail money. This was closely followed by Aviva Investors and M&G which yesterday both announced suspensions on their £1.8bn Property Trust and £4.4bn Property Portfolio, respectively – both retail funds.
All three said the decision was due to an overwhelming volume of redemptions following the UK’s decision to leave the European Union.
In a statement, SLI said: “Due to exceptional market circumstances, Standard Life Investments has taken the decision to suspend all trading in the Standard Life Investments UK Real Estate fund (and its associated feeder funds) from 12.00 noon on 4 July 2016.
“The decision was taken following an increase in redemption requests as a result of uncertainty for the UK commercial real estate market following the EU referendum result.
“The suspension was requested to protect the interests of all investors in the fund and to avoid compromising investment returns from the range, mix and quality of assets within the portfolio.”
Aviva Investors said in a statement: “Over recent months we have been experiencing higher than usual volumes of requests to sell units in the trust, and this, coupled with challenging market conditions in light of investor sentiment regarding the EU referendum, has reduced the cash held by the trust. As it takes time to sell property, we have had to suspend dealing until the amount of cash held in the trust increases.”
Similarly, M&G said: “Investor redemptions in the fund have risen markedly because of the high levels of uncertainty in the UK commercial property market since the outcome of the European Union referendum.
“Redemptions have now reached a point where M&G believes it can best protect the interests of the funds’ shareholders by seeking a temporary suspension in trading.
“This will allow the fund manager time to raise cash levels in a controlled manner, ensuring that any asset disposals are achieved at reasonable values.”
