Several big names in asset management have suspended trading in their UK property funds, citing market conditions and the difficulty of valuing assets.
A spokesman for Aviva Investors said: “Due to the challenging market circumstances, which are impacting the wider investment markets including real estate, the independent valuer of the Aviva Investors UK Property Fund has expressed material uncertainty over their valuation of scheme property.
“Although there is sufficient liquidity in the fund, we have acted to safeguard the interests of all our investors by suspending dealing in the fund with immediate effect. We will look to lift the suspension as soon as it is appropriate to do so.”
Aviva was followed today by Aberdeen Standard Investments, which suspended its £1.7bn Standard Life Investments UK Real Estate Fund and £1.1bn Aberdeen UK Property Fund. A spokesman said : “This action reflects the exceptional circumstances in global markets, including the UK property market as Covid-19 spreads, and the need to protect client interests by suspending trading when there is material uncertainty regarding how the assets should be valued.”
L&G said Knight Frank had said there was material uncertainty in the value of assets in its £2.9bn UK Property Fund and its associated feeder, and suspended both. Columbia Threadneedle has suspended two funds.
Yesterday (17 March), Janus Henderson suspended trading in its UK Property PAIF and UK Property PAIF Feeder Fund.
A spokesman said the move was taken to “safeguard the interests of our investors”.
“The COVID-19 pandemic has created significant market uncertainty,” he said. “This has led the independent property valuer (CBRE) to declare that there is material uncertainty of valuations in the UK property market; including those direct property assets owned by the fund.
“Reviewing this material uncertainty in light of the FCA’s incoming regulations on illiquid assets and open-ended funds, which become effective in September 2020, we believe we need to protect the interests of all investors by suspending dealing in the fund and the feeder.”
Janus Henderson’s move came after the earlier suspension by Kames Capital of its Kames Property Income Fund. “Following continued market volatility and uncertainly for property funds, which began with the 2016 Brexit Referendum and continued in recent weeks with the coronavirus pandemic, the valuers of the Kames Property Income Fund believe the current market turmoil makes it difficult to provide a true value for the funds underlying assets,” a spokesman said.
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