UK Property funds undergo pricing change

A number of UK property funds have made a switch in their long-term pricing basis, lowering the price offered to investors wishing to withdraw money, who will now receive the mid or bid price rather than the offer price. This can result in a 4.5 to 6 percent reduction. These include the M&G Property Portfolio, Henderson UK Property and SLI Ignis UK Property funds. This is following the recent turnaround of net flows from positive or broadly neutral to negative, as property price rises are slowing and Brexit uncertainty remains. The funds have emphasised that the move is about being fair to transacting clients and to existing investors and not due to liquidity issues. With this said, we aggressively cut our property positions a month in advance of this, as we felt it prudent to move to a more modest exposure to property given our concerns over such pricing or liquidity constraints. Our portfolios were therefore protected from the full brunt of this change in pricing.