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Standard Life, Henderson to lift fund suspensions in Q4

The decisions mean all seven UK firms which suspended trading on their UK property funds following Brexit have now either lifted the gating or announced when the vehicles will reopen. 

Two of the firms which gated their UK property funds in the aftermath of June’s EU referendum result have announced they will lift their suspensions in the fourth quarter of 2016.

Henderson Global Investors said it intends to reopen the £3.9 billion ($5.1 billion; €4.5 billion) Henderson UK Property PAIF and Feeder fund from October 14. Standard Life Investments (SLI) was less precise, stating that the trading suspension on its £2.5 billion UK Real Estate PAIF fund would be lifted sometime before Christmas.

The moves by SLI and Henderson mean all seven firms which suspended trading on their open-ended retail funds have now either lifted the gating or announced when it will be lifted. Both SLI and Henderson also confirmed that a number of assets were sold from their affected funds, however neither firm would disclose which assets had been sold nor details about pricing.

Henderson said it began processing redemption orders this week, ahead of a full re-opening on October 14. Ainslie McLennan, co-manager of the affected Henderson fund, said the notice period would allow investors time to make “informed decisions” ahead of the reopening.

“We are pleased with the pricing attained on the assets sold in the period since June 23, 2016, with the majority of sales exceeding December 31, 2015, valuations,” added McLennan. “We are comfortable that this was achieved without compromising the diversification and performance potential of the remaining property portfolio. The focus remains on holding a strong portfolio of defensive, core assets with a mix of robust tenants on long leases across all sectors.”

Speaking at a press briefing this week, David Paine, SLI’s head of real estate, said he was hoping for an “orderly reopening” after it suspended trading on July 4 as it was “unable to meet redemption requests”.

“We are moving towards an orderly reopening. At the present time, it would be our intention to reopen in the fourth quarter. The decision is not just about liquidity, we are also assessing the level of redemptions that might follow the lifting of the suspension,” said Paine.

SLI and Henderson suspended trading on their open-ended retail UK property vehicles on July 4 and July 5 respectively, following a run of redemptions by nervous investors after the UK voted to leave the European Union. Just days later, Aviva Investors, M&G, Canada Life, Columbia Threadneedle and Aberdeen Asset Management followed suit. 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 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. In August, Aviva Investors told clients 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.

Earlier this month, Canada Life and Columbia Threadneedle announced they would be lifting the trading suspension after freeing up enough liquidity through asset sales. While M&G, similar to Standard Life and Henderson, announced last week that it was waiting until Q4 before making an announcement.