Canada Life and Savills launch frozen real estate funds in UK

LONDON (Reuters) – Canada Life on Thursday reopened its suspended £ 341million UK real estate fund and Savills Investment Management said it partially reopened two funds, as the sector shows new signs of life after a freeze of six month.

Much of the UK’s £ 70bn real estate fund market was put on hold in March due to uncertainty over valuations in the wake of the COVID-19 pandemic.

Surveyors lifted this uncertainty warning last month and funds such as those managed by BlackRock BLACK.N and legal and general LGEN.L have started to reopen.

Others were more cautious, concerned about the possibility of large withdrawals from investors, especially for funds that allow investors to withdraw their money on a daily basis.

Canada Life’s LF CanLife UK Property ACS, which typically offers daily buybacks, resumed operations on Thursday, the company said in an emailed statement.

Harry de Ferry Foster, UK co-head at Savills Investment Management, said the company recently completed outstanding March redemption requests for two funds with quarterly redemption periods – the UK Income and Growth Fund and the Charities Property Fund.

The June and September redemption requests would be completed in December, he said.

The funds “have chosen to open cautiously,” said de Ferry Foster, to avoid the risk of large redemption requests and to maintain high levels of liquidity for new capital investments.

Britain’s Financial Conduct Authority (FCA) has proposed that a wait of up to six months for redemptions could prevent an investor rush and widespread fund suspensions in the future.

The Bank of England backed the FCA’s plans on Thursday, saying an even longer delay could be beneficial.

Reporting by Carolyn Cohn, editing by Lawrence White and Susan Fenton

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