Henderson, Columbia Threadneedle join UK property fund freeze

Added 6th July 2016

Henderson Global Investors and Columbia Threadneedle have announced they have suspended all trading in their respective UK property authorised investment funds (Paifs) and feeder funds, the firms said on Wednesday.

Henderson, Columbia Threadneedle join UK property fund freeze

The Henderson UK Property Paif and the Threadneedle UK Property Paifs are the latest major property funds to shut their door to redemptions this week, following hot on the heels of Standard Life, Aviva Investors and M&G.

Henderson said the decision to close the £3.6bn ($4.7bn, €4.25bn) fund was taken despite a strong underlying portfolio “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”.

Henderson confirmed that income distributions will continue throughout the period of suspension.

The sector has been hammered by investor concerns about the longer term prospects for commercial property in the UK following a vote to ‘Leave’ the European Union that has been exacerbated by the mechanical strictures of these funds that offer daily dealing yet invest in highly illiquid assets.

Like the other four, Columbia Threadneedle said its intention in gating its £1.4bn fund was to ensure “the fair treatment of all our investors whether they are transacting now or investing for the longer-term”.

It added: “We have not been immune to the recent trend of retail outflows from the sector and so far these requests have been met from the cash balance retained within the Threadneedle PAIF. However, it is expected that these requests to sell will continue for the time being due to uncertainty in the market following the UK Referendum result, therefore the temporary suspension of dealings allows sufficient time for the orderly sale of assets, and protects the interests of all investors.”

See also: Property panic shows investment trust potential.

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Geoff Candy

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Geoff Candy joined Portfolio Adviser as News Editor in May 2014. He has been a financial journalist and broadcaster since 2005 and, in that time has worked in both South Africa and the Netherlands, covering everything from high street retailers and construction companies to mining and insurance.


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