Open-ended property funds could be a 'car crash', warn fund selectors

Warning of fund suspensions in the event of a no-deal Brexit

Industry commentators have warned open-ended UK property funds could come under pressure again as uncertainty around the UK's withdrawal from the EU continues, with the possibility of mass outflows and even fund suspensions in the case of a no-deal Brexit, as was seen in 2016 in the fallout from the EU referendum.

In the days following the Brexit vote, Standard Life halted dealing in its now £2.1bn UK Real Estate fund, with Aviva, M&G, Henderson (now Janus Henderson) and others following suit in the ensuing weeks with their respective property funds, as investors rushed to withdraw their money on fears of falling valuations in UK commercial property. Many also added a fair value adjustment to their portfolios as direct property is not subject to daily pricing, taking into account falling property prices. Square Mile: The best ways to spot attractive property funds LGIM introduced a 15% disco...