Jonathan Webster-Smith, who works on several model portfolios for the firm, said his bearish stance on the asset class had been exacerbated following the referendum result.
As such, the asset allocator exited a 4 per cent holding in the £4bn Henderson UK Property fund just before the vote.
The fund has since suspended trading alongside five other asset managers. Prior to this, the fund group imposed a 4 per cent “fair value adjustment” after its independent valuers raised concerns.
He said: “We sold a small position in [the fund]. I’m ultra conservative when it comes to property unit trusts. The property market’s potentially quite vulnerable because of investors not buying it while uncertainty is here.”
In advance of the vote, Mr Webster-Smith also took defensive moves that have benefited his investors in the short term.
This included moving 5 per cent overall from his UK equity holdings – which include the likes of Standard Life Investments UK Equity Unconstrained fund – into a tracker in May, in order to reduce his exposure to smaller companies.
He explained: “A tracker gives you FTSE 100 exposure, which offers upside from the US not raising [interest] rates. We were also too exposed to mid- and small-cap firms. Reducing this has been very beneficial in the short term following the vote.”
Similarly, in mid-June, when polls appeared to suggest better prospects for the Leave campaign, the team raised additional cash. The move took cash levels to 10 per cent in the low-risk portfolio at the most defensive end of the range, and to 6 per cent for higher-risk offerings.
“Some of the polls were putting Brexit in the lead,” he said.
“We made a small shift to cash and raised around 3-4 per cent about a week or two before the vote. That wasn’t because we had any particular foresight, but I feel now the market’s going to be volatile.
“We took profits out of UK and European equities because we wanted that additional firepower and protection.”
However, Mr Webster-Smith is unsure of when or where to deploy this capital. “Cash is now just under 10 per cent, which I think gives us quite a nice platform to buy back in [to markets] when we see the time is right,” he said.
“I’m not convinced I have the answer on when we buy back in. We are watching and waiting.”