A second UK fund has ceased trading and frozen its trust this week due to anxious investors demanding their money back following the Brexit referendum.
Aviva Investors Property Trust in London halted its $2.4B real estate fund today, following savings and investment fund Standard Life Investment’s decision to freeze its fund Monday for similar reasons—investors trying to pull their money, Bloomberg reports.
During the Great Recession withdrawals surged and real estate funds were forced to freeze operations—resulting in a property market dive that drove values down 40% in the UK.
“The dominoes are starting to fall in the UK commercial property market,” Hargreaves Lansdown senior analyst Laith Khalaf says. “The problem these funds face is that it takes time to sell commercial property to meet withdrawals, and the cash buffers built up by the managers have been eroded by investors heading for the door.” [Bloomberg]
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