In the wake of the M&G property fund suspension, investors have withdrawn tens of millions of pounds from the Aberdeen UK Property fund, sparking fears of a repeat of the 2016 crisis.
Daily outflows from the £1.3bn Aberdeen UK Property fund reached £31m on Wednesday, the day M&G announced the suspension of the M&G Property Portfolio. This nearly equals the outflows for the past four months combined, according to estimates from Morningstar and reported by the FT.
The large withdrawals will continue to worry investors, despite reassurances from the industry that it is not seeing a repeat of the 2016 crisis, where many property funds suspended trading in the wake of the Brexit vote.
The UK CRE fund sector assets under management (AUM) fell 18% in 10M19, according to Fitch Ratings, and Aberdeen UK Property fund has seen a reduction of 32%. M&G's property fund shrank by 28% and the Aviva Property Trust lost 33% in AUM.
Cash accounted for 14.6% of the Aberdeen fund's assets at the end of November, which leaves it with an estimated £160m after Wednesday's redemptions.
If redemptions were to continue at the same pace, SLA's fund could exhaust its cash within a week, according to FT calculations.
AJ Bell head of active portfolios Ryan Hughes said: "This is what we saw in 2016. Investors try to get out quickly because they are worried about being the last ones left in the fund and getting out at below market price."
SLA said it was monitoring the situation closely and assessing any impact the M&G gating had on investor sentiment. It said its fund would maintain its cautious Brexit stance until there was "greater clarity on the outlook for the UK economy in the context of Brexit and the upcoming general election". It declined to comment on the level of outflows."
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