Aviva Investors suspends property funds as CBRE warns of market uncertainty
Aviva Investors has suspended its property fund, following similar decisions by Kames Capital and Janus Henderson yesterday.
In a statement, Aviva Investors said the coronavirus outbreak had impacted the UK property market and “made it difficult to value the property owned by the funds with the same degree of certainty as would otherwise be the case.”
Aviva’s independent valuer, Knight Frank, advised the firm that there is material uncertainty for all assets associated with future valuation.
The firm said there is a “material risk that investors may buy and sell shares/units at a price which does not fairly reflect the value of those shares/units. If we allow dealing to continue some investors may be advantaged at the expense of others.”
Aviva Investors will suspend all dealing in the funds with effect from noon today, and is suspended until further notice.
Yesterday, Aviva confirmed it will still pay its dividend in May despite its financial position contracting. The firm said its solvency cover ratio had fallen to 175 per cent, down from 206 per cent in December.
The firm said that its estimate “does not allow for any increase in insurance claims or changes in experience or assumptions that may arise from Covid-19”.
Aviva’s suspension comes after similar decisions made by Kames Capital and Janus Henderson yesterday.
Janus Henderson suspended dealing in both its property fund and its feeder yesterday to “protect the interests of all investors”. Similarly, Kames Capital fell victim to market uncertainty brought on by the coronavirus outbreak.
Both firms’ independent valuer, CBRE, announced today it will include a market uncertainty clause in all its valuation reports, due to the “unprecedented circumstances” caused by the coronavirus outbreak.
In a statement to investors, Kames said: “Following continued market volatility and uncertainly for property funds, which began with the 2016 Brexit Referendum and continued in recent weeks with the Corona Virus pandemic the valuers of the Kames Property Income Fund believe the current market turmoil makes it difficult to provide a true value for the funds underlying assets.”