On 4 July 2016, Standard Life Investments suspended trading
as a result of investors flooding the gates for redemptions.
Several other funds such as M&G and Aviva Investments followed
suit throughout the same week.
The decision to suspend redemptions by these large property
funds has triggered discussions surrounding the fate of the
property market and whether this is a repeat of 2008, when funds
were last similarly gated. More fundamentally, this has also
brought to the forefront the key question of whether real estate is
even an appropriate asset class for an open-ended fund.
What is an open-ended fund? An open-ended fund
is a fund that does not have restrictions on the number of shares
issued or redeemed at any time. Shares are issued by the fund and
likewise sold back to the fund based on the fund's net asset
value at the time rather than to another investor, which creates
liquidity for any investors looking to redeem their shares quickly.
The attraction of an
