Is actively suspending illiquid property funds the answer?

Reaction to launch of FCA rules on non-UCITS retail schemes

Mike Sheen
Investment Week deputy news editor Mike Sheen

Investment Week deputy news editor Mike Sheen

Last week the Financial Conduct Authority (FCA) revealed its new rules for non-UCITS retail schemes (NURSs) investing in inherently illiquid assets.

While the suspension of Woodford Equity Income - a UCITS fund - has been the big fund liquidity story of 2019, the regulator appears primarily worried about open-ended property vehicles. The 2016 property fund gatings in the wake of the Brexit referendum served as a stark reminder of the pitfalls of investing in inherently illiquid assets like bricks and mortar via an open-ended vehicle. And with a regulator that is actively supportive of the fund suspension mechanism as a means of protecting investors, and new rules that seemingly encourage it, it seems likely that gatings will becom...

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