Threadneedle to lift suspension on £1.3bn Property fund

Threadneedle to lift suspension on £1.3bn Property fund

Columbia Threadneedle has lifted the trading suspension on its £1.3bn UK Property fund after making £167m of disposals since July.

The property fund was one of five to gate in the aftermath of the UK’s decision to leave the EU after sentiment on the UK property market plummeted.

However, the fund will now re-open on a bid-price basis with no other pricing adjustments. It will also return to monthly valuations after becoming weekly during the suspended period.

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Don Jordison, managing director of property at the firm, said commentary after the vote now appeared irrational with “more informed reflection” settling the market.

“In the short period following the referendum we saw animal spirits drive unprecedented levels of redemptions from daily dealt open-ended property funds.

“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.”

Columbia Threadneedle said it had agreed to sell or exchange 25 properties totalling £167m since July, with no forced sales. It added that selling prices were less than 1 per cent down on valuations before the vote on June 23.

The sales came due to the fund having lined up around £100m of potential sales in preperation for events such as those that transpired, the firm added.

Columbia Threadneedle now becomes the second firm to re-open its property fund after Canada Life Invesrtments. However, the insurance-owned asset manager continued to apply a 7 per cent fair value adjustment on its vehicle.

Aberdeen and Legal & General Investment Management – two firms which did not suspend trading indefinitely – have also reduced or removed price dilutions and fair value adjustments made on their vehicles in recent week.

However, for other asset managers, immediate re-openings do seem unlikly. Aviva Investors recently told unit holders it may not re-open its £1.8bn fund until March 2017.

Likewise, Fiona Rowley, manager of the £4.4bn M&G Property Portolio, said it would not re-open its fund until cash levels reached at least 12.5 per cent of the fund. At July 31 this stood at 5.1 per cent. Henderson chief executive Andrew Formica also implied his fund’s suspension would not be lifted until late 2016.