Now Standard Life plans to reopen Brexit-hit property fund

David Paine, head of real estate investments at the £269 billion fund manager, told a conference on September 20 that SLI was “making good progress” on rebuilding and assessing the liquidity that its UK Real Estate Fund would require when the trading suspension lifts.

He said that, based on that progress, SLI was “very much focused” on reopening the fund sometime in the fourth quarter.

SLI was among several large asset managers forced to close funds investing in UK commercial real estate following the country’s June 23 vote to leave the EU. The result sparked liquidity concerns among investors who sought to quickly pull money from the funds, which typically offer daily liquidity.

But the asset managers have begun to reopen, or put timeframes on reopening, the funds.

Paine’s comments come a day after Henderson Global Investors said it would reopen its UK Property PAIF and Feeder Fund on October 14, and a week after Columbia Threadneedle Investments said it would lift the trading suspension on its property funds at noon on September 26.

Paine said: “Our fund manager for this fund is out on the road this week looking to assess the level of potential redemptions that might follow at reopening because that is another key ingredient and that has changed over the period. The picture today is much calmer than it was in the immediate aftermath [of the Brexit vote].”

He declined to provide specifics of the fund’s progress in selling properties, but admitted that the in the immediate aftermath of the vote, it had been “inundated with offers” from overseas investors from the likes of North America and Asia, looking to buy cut-price property in the UK – offers that the firm did not proceed with.

In August, Aberdeen Asset Management, which had lifted the gating on its property fund the previous month, cut its price discount on redemptions, while Canada Life, which runs a range of smaller funds, began to allow investors to withdraw funds in September.

Of the 10 largest funds in the sector, those run by Aviva Investors and M&G Investments also remain closed to new money or investor redemptions.

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