Aegon Scottish Equitable and Scottish Widows have closed the door on their UK commercial property funds to prevent an exodus of investors.
The firms join Friends Provident which imposed a six-month notice period on its £1.2bn fund in December.
Aegon has introduced a deferred period of up to 12 months on its Scottish Equitable fund which applies to policy surrenders, transfers and switches out of the funds. Regular income payments, retirements and death claims are unaffected.
Aegon, which outsources the fund to Morley Asset Management, says the move is a bid to protect investors. Fleeing investors had reduced the cash buffer in the fund to just 4 per cent of its total assets at £80m.
Scottish Widows has written to 200,000 policyholders informing them of a six-month notice period on its life and pension property funds.
It says the move will allow it to implement a more orderly programme to provide liquidity while enabling managers to sell properties at a fairer price.
New Star and Norwich Union have moved to fortnightly valuations on their property funds, whose recent valuations have fallen by 0.49 and 0.6 per cent.
Plan Invest joint managing director Michael Owen says: “The damage has been done and unless you are overweight in property, there is no point in cutting back. The only danger is panic selling which life companies are trying to prevent.”
RESTRICTIONS ON PROPERTY FUNDS
Date Action taken
Scottish Widows January 21, 2008 180-day notice period on transactions in its £2.1bn property fund
Aegon January 18, 2008 Withdrawals from £2bn Scottish Equitable property fund delayed for up to 12 months
NU/Morley December 31, 2007 Moves to fortnightly valuation on Norwich property trust and £2.8bn Norwich property investment fund
Friends Provident December 20, 2007 Imposes six-month redemption period on £1.2bn property fund
New Star December 10, 2007 Moves to fortnightly valuation on £2.1bn fund
M&G November 22, 2007 Places 90-day notice period for institutional investors in property portfolio fund
Skandia Moves to offer basis on £400m property fund
Standard Life Moves to bid basis on £3bn pension fund and £1.5bn life fund
Clerical Medical December 2007 Revalues £1.8bn life and pension funds down by 13 per cent
Legal & General Moves to mid-month valuation on £2.4bn life linked and £1.2bn pension linked property funds
Resolution Moves to bid basis on £548m UK property fund