Fitch Ratings has warned that property funds could halt trading in the coming weeks as a result of Brexit-related market turbulence, leaving investors facing a potential liquidity crunch like that witnessed after the UK voted in June 2016 to leave the EU.
On Tuesday the rating agency said investors in open-ended UK property funds faced a “growing risk” that funds would suspend trading units next month. Funds were “unlikely to be able to meet a potential surge in redemptions by selling assets, given the illiquidity of commercial property”, Fitch added.
Property funds are facing increased outflows as investors fear the impact of Brexit on the sector and as they battle sliding values within their portfolios.
