The watchdog had released the results of its previous consultation on fund notice periods - which included a suggestion that investors in open-ended property funds could have to wait 180 days to get their money back.
But it said it needs more time to receive feedback on a new structure it is proposing to solve the issue - the long-term asset fund.
This concept was first outlined by the Investment Association in 2019 and is a new open-ended fund structure designed specifically to facilitate investment into long-term, illiquid assets.
Another way investors can get liquid exposure to property is through REITs, however the industry has been noticeably reticent to adopt them in place of open-ended funds.
Hughes said: “These properties trusts are trading on maybe 20 per cent discounts at the moment. And the trade off there is of course, you can get your money back tomorrow, but you're going to get 20 per cent less of the current price of the asset.
“It's up to investors to choose which one they want to follow.”
He added: “Ultimately, investors need to accept that there's a trade off between liquidity and access. You can't invest in illiquid assets and expect [the same access as] in liquid structures.”
Ben Yearsley, investment consultant at Fairview Investing, highlighted his surprise that more open-ended property funds haven’t mirrored BMO’s property growth and income fund.
The fund is a hybrid and invests around 30 per cent in direct property, and the rest in REITs.
“[The hybrid structure] gives you the best of both - it gives you less volatility than a pure REIT fund, access to unique assets, and it allows BMO to invest fully.”
The factsheet for Aviva’s fund said at least 70 per cent of the fund was invested in direct property.