“While property investment companies were certainly not immune from the post-referendum turmoil, seeing sharp share price declines and widening of discounts to their net asset values, managers of such vehicles did not have to start disposing of assets to meet redemption requests from panicky investors,” Hollands continued. “These vehicles have bounced back from their nadirs with their portfolios intact without undue disruption to patient shareholders and have also provided strong returns from contrarian investors who bought into the weakness.”
The question as to whether open-ended property funds are here to stay cannot be answered with certainty now, but the how assets flow in the months following the lifting of the suspensions will be very interesting to watch. There is of course no chance a fund group is going to close a large fund that is maintaining or growing its AUM, but if there is a continuing bleed of investor money, asset managers’ hands could be forced to convert their funds to a closed-ended structure.
