View more on these topics

Which commercial property funds were worst hit in the wake of Brexit?


Data collected from Morningstar for Money Marketing reveals the extent of the outflows from gated commercial property funds following the vote to leave the EU.

The Henderson UK Property Paif Feeder fund is a unit trust for those investors who cannot, or do not wish to, invest directly in the £3.1bn Henderson UK Property Paif fund.

The data reveals the Henderson UK Property PAIF fund has lost £630m since the Brexit vote and £643m for the year to October.

For the year to date, the PAIF Feeder fund has lagged the UK Property category, falling 4.36 per cent against 2.55 per cent loss of the benchmark, while the PAIF also underperformed the category, losing 3.72 per cent over the same period.

Henderson says the Feeder fund only invests in shares in the PAIF and “should therefore broadly perform in line with the PAIF”.

Meanwhile, the Aberdeen UK Property Feeder fund saw outflows of £503m since June, the second-largest loss after the Henderson UK Property PAIF, which shed £603m since the EU referendum.

However, the £491m Aberdeen UK Property fund suffered the biggest losses through the year of all 17 UK-domiciled commercial property funds, with outflows of almost £3bn. Since the Brexit vote in June it had outflows of £58.6m.

Taking stock of the market

Overall, more than £4.5bn flowed out of commercial property funds this year, despite most funds suspending dealing amid a surge of redemption requests.

Morningstar says the data on commercial property funds is subject to review as it can fluctuate based on changes to share classes and fund structures.

Hargreaves Lansdown senior analyst Laith Khalaf says commercial property has been a “hugely popular” sector since before the start of the year, despite the fallout during the summer. He says: “Commercial property funds were on the podium of the most popular sectors, especially for people looking for income and diversification as bond funds become too expensive because of monetary policies.”

From 5 July, both the Henderson UK Property PAIF and its associated Feeder fund were suspended, while Aberdeen took a different approach, applying a downward adjustment of up to 17 per cent to pricing for those seeking to redeem cash from its property funds. The fair value adjustment was then decreased to 5 per cent in August.

Standard Life Investments, M&G, Columbia Threadneedle, Henderson and Aviva Investors are among fund groups that have imposed temporary “gates” on existing investors. Other groups have, like Aberdeen, have applied pricing adjustments.

All the fund groups have now lifted the suspensions.

At the time, both the FCA and the Bank of England said they would examine ways to restructure property funds to prevent another panic.

This week, the FCA has again raised concerns over the wave of fund suspensions and whether fund groups could have been more transparent with investors.



FCA guards against repeat of gated property funds saga

The FCA has raised concerns about the wave of property fund suspensions in the wake of the Brexit vote and whether fund groups could have been more transparent with investors. Speaking to the Financial Times, FCA chief executive Andrew Bailey said the suspensions seen over the summer were “sensible” but said there were questions over […]

Aviva sign 480

Aviva Investors to reopen £1.5bn property trust

Aviva Investors is to reopen its property trust five months after trading was suspended in the fallout from the Brexit vote. The only property trust to remain closed following the raft of suspensions earlier this year as spooked investors rushed to the exit, dealing in the £1.5bn Aviva Investors Property Trust will resume on 15 […]

M&G to lift suspension on £4bn property fund

M&G Investments will reopen its £4.1bn Property Portfolio and feeder fund on 4 November after four months since its suspension. This makes the Aviva Investors Property Trust the only commercial property fund still suspended since the EU referendum. As part of their move, M&G will also remove the fair value adjustment applied on 1 July of […]

International jurisdictions

By Neil Jones, Canada Life Investing through international providers has grown in popularity over recent years as investors seek out the benefits of gross roll-up and the wider range of investment options that can be available. When considering a recommendation for a lump sum investment, not only does the adviser have to select a suitable tax wrapper […]

Healthcare regulation amalgamation predicted for Gulf states

While Dubai is leading the way in terms of legislating for expat healthcare in the Gulf, Qatar, Abu Dhabi and others are watching and learning – that’s according to Jelf International’s director of international services, Doug Rice. He believes the pace of change in the Gulf states will continue and that some level of unified healthcare system will be introduced across the region.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm