Standard Life to re-open suspended fund

Standard Life Investments (SLI) will re-open its UK Real Estate fund on 17 October having suspended trading in the immediate aftermath of June's EU referendum.

Standard Life HQ in Lothian Road. Picture: Neil Hanna
Standard Life HQ in Lothian Road. Picture: Neil Hanna

Analysts said the UK property fund sector was returning to a more normal state following today’s announcement from the Edinburgh-based group.

SLI UK Real Estate was one of a number of similar funds to suspend trading in early July in the wake of the Brexit vote.

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The firm said that decision had been taken in order to protect the interests of all investors in the fund following an “unprecedented” level of redemptions.

In today’s statement it said it had subsequently implemented a “controlled and structured asset disposal programme in order to raise sufficient liquidity to meet future redemptions”. Work is ongoing to ensure the fund is “well positioned for markets in the long-term”, SLI added.

David Paine, head of real estate at Standard Life Investments, said: “In the immediate aftermath of the EU referendum result redemptions from retail investor property funds increased dramatically whilst property transactions reduced significantly.

“During the period of suspension the fund has been able to restore liquidity through an orderly disposal of assets.

“We are pleased with the progress made and the removal of the market value adjustment, and able to announce the reopening of the fund next month.”

He added: “The Standard Life Investments UK Real Estate fund invests in a diverse mix of prime commercial property. Its lower risk positioning should therefore be beneficial for performance at times of market stress and uncertainty and continues to offer a stable and secure income.”

Laith Khalaf, senior analyst, Hargreaves Lansdown, noted: “The UK property fund sector appears to be returning to some semblance of normality, though there are still some big funds out there that are yet to open their gates.
“The big freeze that beset property funds over the summer could well recur if the sector sees more large withdrawals, so investors should make sure they are willing to accept this ongoing risk, and to hold the funds for the long term.”