Columbia threadneedle suspends uk property fund dealing

Columbia Threadneedle's other retail property funds remain open and are unaffected, the company said

Investment manager Columbia Threadneedle said on Tuesday it has suspended dealing in the £453 million ($503.51 million) CT UK Property Authorised Investment Fund and its feeder fund to restore liquidity.

Income from the fund and its feeder fund, CT UK Property Authorised Trust, will continue to be paid while dealing in the fund is suspended, the company said in a news release.

Columbia Threadneedle's other retail property funds remain open and are unaffected, it added.

Property funds and other more liquid assets are under pressure from UK pension funds that need to sell out to meet collateral calls on hedging positions following wild swings in gilt yields.

The suspension of the Columbia Threadneedle fund, which is aimed at retail investors and is normally open for daily redemptions, follows a move to add restrictions to another Threadneedle fund aimed at institutional investors last week.

BlackRock Inc, CBRE and Schroders also last week deferred payments in funds aimed at institutional investors.

Abrdn and M&G said late on Tuesday their property funds were trading normally.

Contagion risk has been contained so far, but increasing redemption requests may cause some funds to make forced sales, pushing down asset values, Fitch Ratings said in a note earlier on Tuesday.

This could lead to knock-on effects for other funds, through weaker returns, potentially triggering more widespread withdrawals, it said.

Property funds were suspended following the Brexit vote for Britain to leave the European Union in 2016 and after COVID-19 lockdowns in 2020, and have come under scrutiny from regulators for the mismatch between the length of time needed to sell property assets, and their structures which allow frequent withdrawals.