(Updates with Janus Henderson, industry comment, background)
By Huw Jones and Carolyn Cohn
LONDON, March 17 (Reuters) - Asset managers Kames Capital
and Janus Henderson said on Tuesday they had
temporarily suspended dealings in their UK real estate funds as
market turbulence caused by coronavirus made it hard to
accurately value the properties they contain.
The lock-ups are among the first signs of stress in the
funds industry amid the coronavirus pandemic. They follow the
freezing of M&G's UK property funds in Dec 2019 on
Brexit uncertainty and UK commercial retail property woes.
"The ongoing coronavirus crisis...is a real concern for all
of us," Stephen Jones, chief executive of Kames Capital, said in
a letter to investors.
"At the same time, we have had to contend with a sharply
lower oil price as well as the impact of the ongoing Brexit
negotiations. These issues are affecting all areas of the stock
market, including property investing."
Kames said its regulator, the Financial Conduct Authority,
has been notified.
The suspension of the Kames Property Income Fund and Kames
Property Income Feeder funds came into effect on March 16, and
was in agreement with the funds' Citibank Europe depositary,
Kames said, adding it would update investors on the status of
the fund every 28 days.
Janus Henderson said on its website it had temporarily
suspended dealings in its Janus Henderson UK Property PAIF and
Janus Henderson UK Property PAIF Feeder Fund with effect from
March 16 due to "material uncertainty" about the valuation of UK
property.
The Bank of England and the FCA have said they want
redemption terms for property funds that offer daily
withdrawals, as the Kames and Janus Henderson funds do, to
better reflect the long time it can take to sell real estate
assets in the fund to raise cash.
Many property funds were suspended in the immediate
aftermath of Britain's vote in June 2016 to leave the European
Union.
"Others are probably lining up to go now", said one
investment industry source.
Aviva Investors, Canada Life, Colombia Threadneedle,
Legal & General and Standard Life Aberdeen also
run UK property funds with daily redemptions.
The fund managers did not immediately respond to request for
comment.
(Additional reporting by Sinead Cruise; Editing by Pamela
Barbaglia and Jan Harvey)
Legal & General (LGEN)
Aviva (AV.)
