Ryan Hughes, head of investment research at AJ Bell, comments:
“News that Janus Henderson has suspended the UK Property fund comes off the back of reports that the asset managers are looking to sell the fund to another manager. This uncertainty will undoubtedly unsettle investors and it could have resulted in a number of them looking to sell the fund which in turn could create liquidity pressures on the fund that we have seen before with open ended property funds. By suspending the fund, it will allow for a more orderly process in selling but will no doubt cause significant concern for investors in the £1bn fund who now can’t access their money again.
“This move from Janus Henderson once again underlines why open ended property funds remain ill-suited to the daily dealing expected from OEICs. The fundamental mismatch in liquidity means that as soon as funds come under pressure they have little option but to suspend to avoid investors rushing for the exit faster than the managers can sell the underlying assets. It’s certainly possible that this move may push investors in the few other open ended property funds to re-evaluate their exposure and potentially sell out, causing a ripple effect.
“The whole property sector has been under a cloud for some time given the FCAs review into the space and we still await the outcome of that process. Quite clearly, it can’t come soon enough for investors who remain in limbo and once again see their assets stuck in a fund that they can’t sell.”
