Columbia Threadneedle suspends UK property fund over cash fears
Fund manager Columbia Threadneedle said it had suspended trading in its £453m UK property fund last night after a run from investors caused a cash crisis.
In a statement the fund manager said it had moved to suspend the CT UK Property Authorised Investment Fund and its feeder trust after its cash levels had plunged to such a level it would not be able to meet future redemptions for investors.
Money would not now be returned until an “orderly sale of assets has completed”, the firm said.
The suspension comes amid fears of the knock-on impact of holding illiquid assets in open end funds that allow investors to pull cash on demand. The International Monetary Fund last week issued a warning that such funds could be hit by a run from investors which could cause a liquidity crisis and ultimately threaten “financial stability”.
Pension funds have also been piling pressure on property funds to sell assets so they can withdraw cash, after they were hit by a liquidity crisis two weeks in the wake of the chancellor’s tax-cutting mini-budget.
Columbia looked to assuage the fears of investors and said throughout the year the fund had continued its “strategic sales pipeline in order to meet ongoing liquidity requirements”.
Its other retail property funds “remain open and are unaffected by today’s announcement”, it added.