Measures outlined by the Financial Conduct Authority (FCA) to address the liquidity mismatch in open-ended property funds are expected to dampen investor appetite for the vehicle, and drive flows out of the sector in favour of property investment trusts and ETFs.
The FCA announced on Monday (3 August) its plans to bring a halt to the waves of suspensions in IA UK Direct Property recent years, which included the implementation of a notice period of up to 180 days for consumers redeeming investments. Client director at Bowmore Asset Management Charles Incledon said the changes would mean "a lot of financial advisers will just stop recommending open-ended property funds to their private clients", while wealth managers will be "far less enthusiastic" about the funds. He added: "The issue of private investors being unaware that they might be locked...
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