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Property fund suspensions continue

by: Fiona Nicolson
  • 07/07/2016
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Property fund suspensions continue
Aberdeen Asset Management and Canada Life are the latest property fund managers to make it harder for investors to take cash out of their property funds, following similar moves from Standard Life Investments, Aviva, M&G, Henderson and Columbia Threadneedle.

Aberdeen Asset Management investors can still take cash but the fund house has reduced the dealing price by 17% and took the decision to suspend trading in the funds from 12 noon on 6 July until 12 noon on 7 July on its Aberdeen UK Property Fund and Aberdeen UK Property Feeder Unit Trust.

The company said that its actions had been taken due to rapidly changing commercial property market conditions.

Martin Gilbert, chief executive at Aberdeen Asset Management said: “Our focus has been, and continues to be, treating all customers fairly.”

“Reducing the share price of the Fund reflects the changing market conditions over the past week or so and uncertainty around prices in the property market; sellers requiring liquidity are having to market properties at sometimes significant discounts to their recent valuations.

Aberdeen said the fund has a good level of cash but is protecting remaining holders by fairly reflecting the impact of short-term trading on values provided to redeeming shareholders.

It said: “The property market itself may take some time to find its level, but we believe that the same factors that made property a good long-term investment yesterday remain true today.”

Canada Life also announced that it would be deferring requests for withdrawals from its property funds, from 3pm on 5 July.  The company blamed the move on the UK’s vote to leave the European Union, as a spokesperson commented: “Following last month’s vote to leave the European Union, a combination of uncertainty around the pricing of commercial property assets and the recent rise in requests to withdraw from property funds, has meant Canada Life taking the decision to immediately defer requests for withdrawals.  Deferring requests to withdraw allows us to protect the interests of all investors in the property fund, including those who plan to remain invested for the medium to long term.”

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