Aberdeen Standard Investments has been forced to suspend its £550m global property fund, showing it is not just UK real estate assets that are difficult to value on the back of Covid 19-related market volatility.
In a note to clients, the firm said the valuer for its ASI Global Real Estate fund, had reported “material uncertainty” over valuations of certain assets in the fund.
It said this applied to the fund’s European assets at present, but it “remains a rapidly evolving situation”. The fund’s largest holdings are in Australia, Spain and Ireland, according to its latest fact sheet. There are no UK properties in its top 10.
It suspended dealing in the fund at 12pm on Wednesday. It is the third fund the firm gated on Wednesday, having already announced it ceased trading in its Investment Association UK Direct Property funds, the £1.7bn Standard Life Investments UK Real Estate Fund and £1.1bn Aberdeen UK Property Fund.
The ASI Global Real Estate fund sits in the IA UK Property Other sector.
ASI said in a statement: “This action reflects the exceptional circumstances in the property markets around the world and the need to protect client interests by suspending trading when there is material uncertainty regarding how the assets should be valued.
“We will aim to lift the suspension as soon as confidence returns to the market and there is more certainty regarding asset valuations, taking into account the best interests of customers and investors. We will continue to keep you updated and thank you for your patience and understanding in these difficult times.”
Financial Conduct Authority (FCA) rules due to come into force in September dictate that open-ended funds holding illiquid assets must be gated when the value of more than 20% of assets becomes uncertain.
ASI’s intervention follows the suspension of property funds from Legal & General, Columbia Threadneedle, BMO Gam, Aviva Investors, Janus Henderson and Kames Capital.
So far 10 open-ended property funds worth more than £11bn have been forced to gate this week.
The £2.3bn M&G Property Portfolio gated in December due to Brexit and high retail exposure.
Only one of the mega property funds, Royal London Property, which does not have daily dealing, has yet to update the market about whether it will join the raft of suspensions.
