Fitch: UK property funds liquidity pressures could accelerate LTAF adoption

Warns of further fund closures

Valeria Martinez
clock • 2 min read

Fitch Rating has said the latest wave of liquidity mismatch pressures among UK open-ended property funds may speed up market adoption of the FCA’s Long Term Asset Fund structure.

In a research note published on Monday (10 October), the ratings agency said that a new regulatory framework on redemption notice periods could improve the property fund sector's liquidity management and financial stability.  However, it noted that the option to readily redeem cash from funds is a key factor in investors' allocation decisions and long redemption periods could deter investors from contributing to funds, leading to further fund closures. In March 2021, the UK's financial watchdog proposed a notice period of between 90 and 180 days for redemption requests, as part of a d...

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