Henderson and Threadneedle suspend property funds

The two fund managers confirmed their respective moves in statements on July 6.

Henderson said the £3.9 billion Henderson UK Property PAIF and its Henderson UK Property PAIF Feeder fund had been suspended “to safeguard the interests of all investors”.

It added: “Despite a strong underlying portfolio, the decision was taken due to exceptional liquidity pressures on the funds, as a result of uncertainty following the EU Referendum and the recent suspension of other direct property funds”.

In its statement announcing a suspension of trading in the £1.4 billion Threadneedle UK Property Authorised Investment Fund and its feeder fund, Columbia Threadneedle Investments also said it was seeking to “protect investors”.

Over the past two days, Standard Life Investments, Aviva Investors and M&G Investments have all suspended trading in UK property vehicles due to high levels of redemption requests on the back of the EU referendum result.

Laith Khalaf, a senior analyst at retail funds platform Hargreaves Lansdown, said: “These funds are therefore likely to be closed for weeks and months rather than simply a matter of days. Clearly there has been a knee-jerk reaction to Brexit in the commercial property sector, which may moderate over time.”

Separately, Canada Life said on July 6 that it had temporarily suspended two commercial property funds: Canlife Property and Canlife UK Property. In a statement the insurance and investment group said the decision had been taken “due to the ongoing uncertainty around the pricing of commercial property assets, following the vote to leave the EU”. In a note investors, Canada Life said the funds could be suspended for up to six months.

Colette Ord, a property and infrastructure analyst at Numis Securities, told FN: “You can’t hide away from momentum unfortunately. Until we know where capital values will settle, people are just running from volatility. It’s a wait-and-see game at the moment in terms of how that translates into transaction prices.”

At almost £4 billion, the Henderson UK Property PAIF fund is the second-largest unlisted fund investing in UK commercial real estate. The largest is the £4.5 billion M&G Property Portfolio.

Both the Henderson and Columbia Threadneedle funds offer investors daily liquidity.

The other five largest funds investing in UK commercial property are managed by Kames Capital, Aberdeen Asset Management, Legal & General Investment Management, F&C and Royal London Asset Management.

Aberdeen, LGIM and Royal London all confirmed their vehicles were still trading. A spokeswoman for Royal London pointed to the fund’s largely institutional client base and that fact that, unlike others in its class, it offers monthly liquidity.

Kames and F&C did not immediately respond to requests for comment.

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