Three more UK property funds suspend trading post-Brexit

Three more UK property funds have suspended trading, preventing investors from getting their money back and joining a trend that has prompted a rise in calls from savers to the British financial services complaints body.

The funds pulled down the shutters after a wave of investors asked for their money back amid speculation about a drop in UK commercial property prices following the country’s vote to leave the EU on June 23rd.

Henderson Global Investors, part of Henderson Group, said on Wednesday it had temporarily suspended trading in its £3.9 billion UK Property PAIF and PAIF feeder funds due to "exceptional liquidity pressures" given uncertainty after the Brexit vote and the other suspensions. It was followed by Columbia Threadneedle, part of the Ameriprise Group, which suspended trading in its Threadneedle UK Property Fund.

Canada Life said in a note to investors it had also suspended its Canlife Property and Canlife UK property funds. They join rival funds managed by M&G Investments, Aviva Investors and Standard Life Investments, which stopped trading on Monday and Tuesday.

Meanwhile, Prof Neil Gibson, economic adviser to EY, said while the markets were pricing in a fear that the UK economy will be plunged into recession as a result of the vote, this was not guaranteed.

“A slowdown in business investment will not be enough to trigger a recession in the UK, it’s really the extent to which consumers put their hands in their pockets rather than across the tills which will determine the outcome,” he said.

Reversal

The reversal of sterling against euro was not as pronounced as the sterling/dollar shift, he said, reflecting the fact the vote was a damaging result not just for the UK but for

Europe

as well.

Separately, the British Irish Chamber of Commerce said Ireland needed to consider its unique position within the EU and how it couldn facilitate trade between Britain and the EU. Chamber director John McGrane said Ireland could act as a gateway for trade between the UK and the rest of the EU.

“It’s time to step back and reflect on the Brexit decision in a reasoned manner. Ireland must communicate to investors that we are not only open to business with the rest of our EU partners, but that we will aim to keep those important links with our neighbours in the UK,” he said.

– Additional reporting by Reuters