Aegon Scottish Equitable has become the latest manager to stop investors withdrawing money from a property fund. The decision – which applies to the Scottish Equitable Property, Select Reserve and Select Distribution funds – is a result of cash reserves dropping to 1 per cent of total assets from a typical 10 to 15 per cent.
Customers wishing to take their money out of the funds at any time from now may be required to wait for up to 12 months from the date of instruction before their transaction will be processed. The decision is seen as a move to prevent panic selling by investors.
Aegon blamed a downturn in the property market for the liquidity problems, but added that a new, in-house team was to take over the fund from Morley Fund Management next month. It stressed that this was not a direct consequence of the latest performance.
The deferment will apply only to requests for policy surrenders, requests for transfers and switches out of property funds. Payments relating to regular income already being paid, retirements and death claims will not be affected.
Friends Provident has taken similar action, and more firms are expected to follow suit.Reuse content