In September, we brought it to your attention that the path for suspended property funds to reopen had cleared as the Royal Institution of Chartered Surveyors began to remove the ‘material uncertainty’ clause. This was imposed on property funds in March following the coronavirus pandemic sending stock markets tumbling.
Since this update, many of the property suspensions have been lifted, with the most recent notable fund being the £1.6bn AUM (Assets Under Management) ASI Global Real Estate on the 16th of November. ASI announced that after building up adequate cash positions within their fund over the course of the suspension, and with further asset sales being pursued, they are now in a position to comfortably meet the liquidity levels which may be required by investors.
In contrast, despite the material uncertainty clause being lifted, the TIME Commercial Long Income property fund has opted to remain suspended as they await the outcome of an FCA consultation on property funds. The FCA have opted to launch an investigation due to the number of suspensions which have occurred in recent times. In the consultation paper, the FCA have hinted that they are considering of removing the ability to buy and sell property funds on a daily basis and would instead replace this with a 90 to 180 redemption period.
Initial commentary on this has suggested that this would make open-ended property funds like the above unavailable for holding within an ISA or a Self-Invested Personal Pension, which in turn would cause irreparable damage to the funds themselves.
We will of course continue to monitor this situation and provide you with an update in due course.
If you are looking for guidance on your investments or financial advice throughout the pandemic, book your meeting with one of our experts today by calling 01258 857101, or emailing ian@greenfields.biz.