More than £4.2bn (€5.6bn) of investments tied up in UK property funds will have to stay put after three UK property funds temporarily suspended or deferred trading.
Falling asset values and credit market fears has resulted in a number of investors pulling out of real estate funds in the UK. In response, Close Investments has temporarily frozen its £125.1m property investment portfolio, Closepip, which is a fettered fund of funds that invests only in Close Investments funds.
Trading has also been suspended in one of its sub-funds, Active Commercial Estates, of which Closepip is a majority shareholder. Close said that it expects the suspension to be in place for six months, though this may change depending on market conditions. The group said that the suspension is to ensure that redemption requests do not force fire sales.
Meanwhile, Dutch insurance firm Aegon has introduced a deferment for certain payments from the £2bn Scottish Equitable Property fund and two feeder funds, the Select Reserve fund and Select Distribution fund.
The Scottish Equitable Property Fund is managed by Morley Fund Management. The deferment will apply to requests for policy surrenders, requests for transfers and switches out of property funds.
Depending on the terms and conditions of the relevant policy, investors may have to wait as long as 12 months after instruction before they receive a payout from the group.
Scottish Widows has also imposed a delay for policyholders requesting a full or partial redemption from its £1.012bn Scottish Widows Life Property Fund and the £1.141bn Scottish Widows Pension Fund.
Aegon and Scottish Widows said that deferments will not apply to death claims or payouts made on maturity.
