Breaking News
Investing Pro 0
Free Webinar - The Pyschology Behind The Stock Marketing - Thursday, December 8, 2022 | 04:00PM EST Enroll Now

Some UK property funds defer investor withdrawals

Economy Oct 04, 2022 10:10AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: New residential homes are seen at a housing estate in Aylesbury, Britain, February 7, 2017. REUTERS/Eddie Keogh/File Photo
 
SDR
-0.37%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
BLK
-0.16%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Carolyn Cohn and Elizabeth Howcroft

LONDON (Reuters) - Some of Britain's top open-ended property funds are rolling out new measures to manage investor exit requests, as challenges in meeting redemptions continue to rise amid a sell-off in some UK risk assets.

Last week's spike in UK gilt yields sent many British pension funds scrambling for cash to meet collateral demands from specialist fund managers tasked with helping them to match their liabilities against their assets.

Many pension funds opted to sell bonds to soothe their liquidity crunches but others are also looking to reduce their exposure to less liquid assets like real estate in the near term, according to industry sources.

Columbia Threadneedle said on Monday it was switching to monthly rather than daily exit requests from its 2.3 billion pound ($2.61 billion) Threadneedle Pensions Pooled Property Fund, citing liquidity constraints, market volatility and "a subsequent increase in redemption requests".

"We believe introducing this procedure is in the best interest of investors in the fund, allowing for an orderly sale of assets to meet redemption requests," a spokesperson said in a statement, adding that Columbia Threadneedle aims to return to daily settlement as soon as possible.

Pension funds typically hold a small percentage of their assets in real estate, which can offer regular income like a bond but also the opportunity of capital value growth over time.

But real estate can be tough to trade in and out of compared with stocks or bonds, meaning property funds have to have special mechanisms which give managers time to sell assets to cash investors out.

Rival manager Schroders (LON:SDR) said it would delay paying out most of 65.1 million pounds worth of second quarter redemption requests from its UK real estate fund that would ordinarily have been paid on Oct 3.

Just 7.8 million pounds would be paid on Oct. 3, Schroders said, with the rest rescheduled for on or before July 3.

Schroders said the deferral decision was made in order to maintain the fund's minimum cash holdings and manage committed capital expenditure requirements.

The fund, Schroders Capital UK Real Estate Fund or "SCREF", was worth 2.7 billion pounds as of 30 June.

U.S. funds giant BlackRock (NYSE:BLK) has also deferred redemptions from its 3.5 billion pound BlackRock UK Property Fund following a rise in exit requests in the second quarter of this year, a source familiar with the matter told Reuters.

($1 = 0.8803 pounds)

Some UK property funds defer investor withdrawals
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email