Kames suspends Property Income fund

Kames suspends Property Income fund
Aidan Crawley/Bloomberg

Kames Capital has suspended dealing in its Property Income fund, citing "turbulent market conditions."

The asset manager said in a letter to clients that its independent valuer, CBRE, had been unable to accurately value the fund's portfolio in current market conditions.

The fund has been suspended as of yesterday, March 16, meaning no buy or sell trades have been accepted as of midday Monday. The suspension will be reviewed every 28 days.

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Kames said in the letter: "Under these exceptional circumstances we believe it is in the best interests of our investors to suspend activity within our funds as we are unable to provide a unit price that accurately reflects the value of the fund’s properties".

It follows M&G's decision to suspend its Property Portfolio in the run-up to the December general election. That fund remains gated.

Many physical property funds have performed well this year as other asset classes slump - partly because of the post-election bounce enjoyed by UK property, and in part because portfolios' valuations, unlike their dealing terms, do not change on a daily basis.

Kames said the question of how to accurately price properties "is an issue for the entire property investment sector".

Rules announced by the FCA last year, due to come into effect in September 2020, require property funds to automatically suspend when their valuers find material uncertainty over the pricing of 20 per cent or more of their assets.