Four more asset managers halted trading of U.K.-focused real estate investment funds this week amid fears over the fallout of Britain’s vote to leave the E.U.
Henderson Global Investors, Columbia Threadneedle Investments and Canada Life blocked investors from withdrawing money from investment funds, while Aberdeen Fund Managers blocked withdrawals for a time. That brings the total number of firms that halted operations at U.K. real estate funds this week to seven.
These funds invest in an illiquid asset (real estate) that takes time to sell, but generally allow investors to withdraw money on short notice, which makes them vulnerable to asset runs in the event of a crisis.
Britain’s vote on June to leave the E.U. spooked real estate investors, many of whom worry that London’s property markets could suffer under the political and economic uncertainty that is bound to follow.
“Brexit may very well bring an end to the trend of real estate asset appreciation in the U.K., and London in particular, over the past several years,” S&P Global Ratings analyst Marie-Aude Vialle told CNN Money. [CNN] – Konrad Putzier