‘Panic’ Withdrawals Halt Three More U.K. Property Funds

Source: Bloomberg

Henderson Global Investors, Columbia Threadneedle Investments and Canada Life suspended trading in at least 5.7 billion pounds ($7.4 billion) of property funds, taking the number of U.K. firms curbing redemption to six in the wake of Britain’s shock decision to leave the European Union.

“The problem with open-ended funds is you do start to have panic selling, so you really have no choice but to suspend the fund,” said Jason Hollands, managing director at investment firm Tilney Bestinvest. “There’s an inevitability to this now.”

Henderson said Wednesday it had temporarily suspended its 3.9 billion-pound U.K. Property PAIF fund along with feeder funds due to “exceptional liquidity pressures” and the recent suspension of other funds. Columbia Threadneedle halted its 1.39 billion-pound PAIF and feeder funds and Canada Life froze four funds totaling 450 million pounds.

With the real estate tremors echoing the last financial crisis, the growing fear is that failure to control aftershocks from the Brexit vote will propel the economy into recession. The pound sank to a fresh 31-year low as the fallout continued to reverberate through financial markets.

Read more: http://www.bloomberg.com/news/articles/2016-07-06/henderson-suspends-5-billion-real-estate-fund-on-liquidity