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Columbia Threadneedle lifts post-Brexit fund suspension

The London-based global asset manager is the second firm, after Canada Life last week, to lift the trading suspension on its UK retail fund following the Brexit fallout. 

Columbia Threadneedle has lifted its suspension of redemptions on its £1.9 billion ($2.5 billion; €2.3 billon) Threadneedle UK Property Authorised Investment Fund (Threadneedle PAIF), a measure it implemented just over two months ago following a run of withdrawals from nervous investors in the wake of the UK’s decision to leave the European Union.

Since the fund was suspended on July 6, the firm said it has exchanged or agreed to sell 25 properties totaling £167 million across all UK regions and property types. However, it did not disclose the split between sales and acquisitions. Columbia Threadneedle also confirmed that the prices achieved for the assets it did sell were less than 1 percent down from the last independent valuation prior to the referendum.

“In the short period following the referendum we saw animal spirits drive unprecedented levels of redemptions from daily dealt open-ended property funds,” said Don Jordison, managing director of property, at Columbia Threadneedle.

“Any effects of the Brexit vote on the overall UK economy – negative or otherwise – will take many months, if not years, to transpire and sometime after that for the property market. We are pleased to open the fund again and believe this is in the best interest of our customers. We will continue to closely monitor conditions to ensure the interests of our investors in the fund are paramount at all times,” he added.

In early July, Columbia Threadneedle became the sixth firm to suspend trading on its open-ended UK retail fund, following Aviva Investors, M&G, Henderson, Standard Life and Canada Life. It was quickly followed by Aberdeen Asset Management which also suspended its UK retail fund. The move meant around 60 percent of the UK commercial property market held in such vehicles was under lock and key.

Since then, the affected firms have taken markedly different approaches in terms of deciding how to move forward. In August, Aviva Investors told investors they were likely to be locked into the firm’s £1.6 billion open-ended retail fund for between six months and eight months. In doing so they became the first of the affected firms to confirm that the fund suspension was not a short-term reactionary measure.

During the same month, Henderson announced its fund suspension would remain in place and would be reviewed every 28 days. In the immediate aftermath of the referendum, Aberdeen announced a 7 percent value adjustment on investor withdrawals, but it has since reduced this to 5 percent. M&G and Standard life have yet to announce their intensions regarding their suspended funds.