Property investors trapped in poor funds - cru

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Property investors wishing to get out of a fund may be slapped with heavy penalties or even an exit moratorium, cru Investment Management says.

The firm's chief executive officer Jon Maguire warns investors could be hit with a ‘locked-in clause’ as they clamour to leave property funds. “Investors have ploughed into property funds in recent years, for instance demonstrated by a 723% increase in funds under management for New Star Property between January 2005 and June 2007,” Maguire says. “As the property market starts to fall, we will see the herd mentality kicking in again with investors pulling out in droves.” Maguire says the floodgates have opened on the institutional side, with some life offices refusing to enter the market...

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