It has recently been announced that the high-profile suspension of the M&G Property Portfolio will continue in order to allow time for liquidity in the vehicle to be increased. The travails of UK funds which invest in direct commercial property have been apparent since before the Brexit vote took place in 2016. Investors have been spooked by the potential implications for the asset class by a “hard-Brexit.” This has been compounded by poor returns (see Figure 2., below) as a struggling retail sector continues to be affected by on-line disruption (retail constitutes around 30% of the commercial property market). Lipper

The latest headlines about property funds in the UK seem to indicate the herd behavior of investors may lead to the next shake up of the fund industry in Europe. The M&G Property Portfolio fund became the first fund product to be gated because it couldn’t meet the demand for share redemptions. This all happened after the GAM scandal and the resultant pressure that was put on fund liquidity for some alternative UCITS funds, as well as the gating of the Woodford Equity Income Fund. On one hand, it is understandable that professional fund selectors sell their holdings in funds