Columbia Threadneedle suspends dealing in retail property fund
Two UK retail property funds have become the latest coronavirus casualties with Columbia Threadneedle Investments temporarily suspending dealing in the Threadneedle UK Property Authorised Investment Fund (Threadneedle PAIF) and the Threadneedle UK Property Authorised Trust (Feeder Fund) from 12 noon on 18 March 2020.
This means that investors are temporarily unable to buy or sell shares in the Threadneedle PAIF or its Feeder Fund. Any requests to transact after 12 noon on 17 March have not been actioned and new requests will not be accepted. This action has been taken following discussions with the funds’ depositary, Citibank Europe Plc, UK Branch. The Financial Conduct Authority (FCA) has been notified.
Columbia Threadneedle aims to ensure the fair treatment of all investors in its funds, whether they are transacting now or investing for the longer-term. The suspension of the Threadneedle PAIF is consistent with the FCA’s upcoming rules which require a fund to suspend if more than 20 per cent of its assets cannot be accurately valued.
The Threadneedle PAIF’s independent property valuer, CBRE, has deployed a ‘market uncertainty clause’ which means it is unable to provide an accurate valuation of the PAIF’s assets in the current exceptional market environment. This is consistent with the approach being taken across the broader industry. In response, Columbia Threadneedle has suspended the Threadneedle PAIF and its Feeder Fund until such time that an accurate valuation can be ascertained.
Columbia Threadneedle is monitoring the situation closely and will formally review this decision every 28 days with its depositary.
Gerry Frewin, fund manager of the Threadneedle UK Property Authorised Investment Fund, says: “Our objective is to protect the interests of investors in the fund, by always ensuring the fair treatment of all investors, whether they are transacting now or investing for the longer-term. While we appreciate this may cause some inconvenience, our decision to suspend dealing will prevent any investors being disadvantaged as a result of those redeeming from the fund or investing new money into the fund at an inaccurate price. Consistent with FCA guidance, we believe this is an appropriate measure to take to manage the fund during this period of exceptional uncertainty. We thank our investors for their patience and will continue to provide updates to keep them informed.”
The Threadneedle PAIF and its Feeder Fund invest in physical UK commercial property such as warehouses, shopping centres, high street shops and offices around the UK. Columbia Threadneedle continues to believe real estate should form a part of a balanced portfolio for a long-term investor.