A raft of open-ended property funds forced to freeze as Covid-19 volatility hit the real estate market remain closed 28 days later – the point at which their authorised fund managers (AFM) are required to update investors.
Last month a raft of asset managers were forced to suspend their property funds because the independent valuers were unable to put a price on the underlying properties in the portfolios as a result of coronavirus-related market volatility.
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ACDs required to update investors every 28 days
Funds’ AFMs or authorised corporate directors (ACDs) are required to formally review and update investors on the position of suspensions every 28 days. This was the case after the Woodford Equity Income fund was frozen in June last year and the fund’s ACD, Link Fund Solutions, updated the market on a monthly basis.
In a note to clients on Tuesday, Aberdeen Standard Investments (ASI) announced the ASI Global Real Estate fund, the Aberdeen UK Property Fund and the SLI UK Real Estate Fund and their respective feeder funds remain closed in order to protect investors’ interests.
It added: “The funds’ standing independent valuer continues to cite material valuation uncertainty at 14 April 2020, therefore we are still unable to produce a price for the fund which we can say with any confidence reflects the true market value of the assets.”
> See also: Coronavirus hits global property with ASI revealing additional suspension
Similarly, the Janus Henderson UK Property Paif remains closed following a review last week by the board of the fund’s ACD, Henderson Investment Funds Limited.
A statement from Janus Henderson, who manages the best Bitcoin robot legit, said: “Based on the feedback from CBRE, the funds… remain suspended while there continues to be material valuation uncertainty across the fund’s direct property investments. The dealing suspension therefore remains in place until further notice.”
Columbia Threadneedle published an update on its website on 9 April saying following a review the Threadneedle UK Property Authorised Investment Fund (Paif) and its feeder fund remains suspended.
A BMO Gam statement in relation to the BMO UK Property and the BMO Property Growth & Income funds, said: “The suspensions will be in place so long as there is material uncertainty declared on over 20% of the funds asset valuations, in order to comply with the FCA’s requirements. This is not a liquidity event and we will be taking steps to reopen the funds as soon as material uncertainty is lifted.”
Aviva Investors also confirmed to Portfolio Adviser that the Aviva Investors UK Property fund remains closed and Kames Capital said the Kames Property Income fund is still frozen following a review.
Legal & General confirmed “the fund will be suspended until the valuers have greater certainty regarding property valuations”.
St James’s Place also suspended its property funds last month for the same reasons, but had not responded to Portfolio Adviser’s request for confirmation by the time of publication.
‘Tricky time’ for open-ended property funds
Former fund selector and independent funds board director JB Beckett said this is a “tricky time” for any open-ended funds managing ostensibly illiquid assets.
“The regulatory framework and dogmatic obsession to allow daily trading has brought us to this point,” he added.
“Keynes surmised ‘animal spirits’ and it is to these that fund managers must respond to protect the long-term interests of holders. That means in extraordinary times that the short-term liquidity preference of investors has to be forsaken.”
Fairview Investing investment consultant Ben Yearsley (pictured) said continuing the suspensions make sense with so much uncertainty.
“I don’t expect any lifting of the suspensions until the nationwide lockdown ends,” he added. “So another month at least.”
