Canada Life lifts withdrawal ban on property funds

Added 1st September 2016

Canada Life has lifted the suspension of redemptions on its commercial property life and pension funds, after its decision on 6 July to put a stop on withdrawals in reaction to the UK’s Brexit vote.

Canada Life lifts withdrawal ban on property funds

A “fair value adjustment” on property values in the fund will be applied instead, the company said, which would seek to “balance the interests of policyholders who may leave the fund with the interests of those that remain”.

Canada Life said the current level of fair value adjustment, which factors in independent valuations of the property market, is -7% across all the property funds.

David Marchant, chief investment officer of Canada Life, said that commercial property investment and occupational transaction activity has been subdued in the last two months, and the market outlook remained unclear.

“Our external valuers continue to impose a caution to the accuracy of values in the lack of market transparency.  However, we have been closely monitoring cash flows within the fund and, following the successful completion of two real estate sales during August, liquidity has been improved to a level which we expect can meet redemption requests and ongoing liquidity requirements”.

In August, Canada Life reassured financial advisers that clients using its life bonds can still access their money even if part of their funds are in suspended UK commercial property funds.

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Mark Battersby

Editor, International Adviser

International Adviser

Mark Battersby is editor of International Adviser. He is also programme director for International Adviser events in strategic expat locations around the world, and its flagship FundLinks conference in London. Mark joined Last Word Media in February 2012, having previously worked at Citywire, Interactive Investor International, and FT Business.

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