Scottish Equitable, which runs one of the UK's biggest commercial property funds, has put a halt to withdrawals from investors as a growing number of small investors have sought to flee the sector.
Scottish Equitable, which runs one of the UK's biggest commercial property funds, has put a halt to withdrawals from investors as a growing number of small investors have sought to flee the sector.
Scottish Equitable - which runs a £ 2 bn (EUR 2.7 bn) fund and is owned by Dutch insurance group Aegon - said private investors would not be able to access their money for up to a year. Its restrictions on withdrawals apply to requests for policy surrenders, requests for transfers and switches out of property funds. Payments related to retirements or death claims will not be affected.
In explaining the move, Scottish Equitable pointed to the difficult UK commercial property market, which has undergone difficulties since last summer. 'The property market has endured a difficult period recently and this has had an effect on our funds. We've taken the decision to defer certain payments to ensure fair treatment of all investors in the fund. This means managing the fund to the benefit of long-term investors and enabling those wishing to sell to do so at a reasonable price.'
The fund manager said the level of withdrawals from its property funds had reached the stage where it now had to sell properties to raise cash to meet the request for payments out but noted that commercial property is not a liquid investment and it can take several months to complete a sale.
