Columbia Threadneedle to reopen Brexit-hit property fund

Columbia Threadneedle Investments said it is to lift the trading suspension on a UK property fund that was hit by the UK’s Brexit vote and maintain the investment approach.

The Threadneedle UK Property Authorised Investment Fund – including the Threadneedle UK Property Authorised Trust, a feeder fund – will start trading again September 26, 2016, at the 12 noon valuation point.

Since July the fund has carried out 25 property sales or exchanges for a total of £167 million (€197 million) across all UK regions and property types, with no forced sales.

The prices achieved are in aggregate less than 1% down from the last independent valuation prior to the referendum, the firm said. 

The fund will open without redemption penalties and will return to standard monthly valuations, having moved to weekly valuations during the suspension period. The fund’s price has not been altered through any form of fair value pricing adjustment, “ensuring the ongoing integrity and established investment philosophy of the fund remain robust”.

Trading in the fund was suspended on July 6 in order to protect existing investors in the wake of market instability following the UK’s decision to leave the European Union. The Brexit vote led to significant outflows in retail property funds. 

Don Jordison, managing director of property at the firm, said: “In the short period following the referendum we saw animal spirits drive unprecedented levels of redemptions from daily dealt open-ended property funds. 

“Much of the earlier commentary now appears slightly irrational and more informed reflection has settled the market.  Any effects of the Brexit vote on the overall UK economy – negative or otherwise – will take many months if not years to transpire and some time after that for the property market.”

©2016 funds europe