Posted on 01/17/2008 7:17:34 PM PST by blam
Panic selling shuts £2bn fund
· Scottish Equitable acts after slump
· Fears that other funds are at risk
Patrick Collinson
The Guardian (UK)
Friday January 18 2008
The fund, invested in London office blocks and shopping centres across Britain, apparently no longer has sufficient cash reserves to meet demands from investors. Photograph: Martin Argles
One of Britain's biggest property funds was forced to shut its doors to withdrawals yesterday after the slump in commercial prices triggered panic selling by small investors.
The move prompted fears of a Northern Rock-style run on billions of pounds invested in once high-flying funds which many savers have seen as a safe haven for their pensions.
Scottish Equitable said yesterday that 129,000 small investors in its £2bn property fund will not be able to access their money for up to a year, although payments relating to regular income already being paid, retirements and death claims will not be affected.
It said the fund, invested in London office blocks and shopping centres across Britain, no longer had sufficient cash reserves to meet demands from investors wanting to withdraw their money. Its "buffer fund" was down to 1% of its total assets, instead of the usual 10-15%.
Commercial property values, especially in the City of London office market, have dived amid fears of a recession brought on by the global credit crunch.
In late December another insurer, Friends Provident, halted access to its £1.2bn property fund and last night speculation was growing that Scottish Widows may be on the verge of restricting customer withdrawals on some of its funds. The insurer said last night: "We are looking at all the options, but no decisions have been taken."
(Excerpt) Read more at guardian.co.uk ...
this is getting ridiculousnesses
What’s that building- Buckingham Phallus?
Are they saying that the building has suffered a lack of
Viagra and has sagged so to speak?
they call it the bullet building.
They screwed up. But being Britain, the Her Hajesty’s govt will write a big check and release the endorphins.
LOL
A lot of financial institutions are saying that they don’t want to mark to market because of the ridiculously low market valuations being assigned to their assets (compared to the ridiculously high prices assigned by their computer models). But the reality is that they need to mark to market because a lot of investors want their money back *now* on the off-chance that (1) the models are wrong and (2) there may be nothing left of their money tomorrow. Marking to market *today* is actually a good reflection of the actual value of their assets because they will need return that money to their clients *today*.
We got so lucky. In December, we exercised at $40/share and sold a bunch of my husband’s stock options at $60/share. Right after that, the stocks started tumbling. His stock is now around $30/share. We would not even exercise the options now because we would lose money.
Anyway, I’m glad we got out when we did. We were so lucky.
He has more options that vested on January 1. Those are worth nothing, now.
The thing that makes me so angry is that those of us who lived within our means are paying a huge price for the greed and foolishness of others. Nothing new in that I suppose, but it still angers me.
There’s a couple in my Bible study group that lost their home. They didn’t have to foreclose on it, but they did have to take a big hit financially to sell it.
I haven’t had much sympathy for them. First, they bought a single family home in California and it sold for $799,000.
The woman didn’t work, and the husband is a mortgage broker. He got a fancy loan for himself, but then he stopped making any money because the housing industry is in crisis.
The woman is pregnant with her 2nd child, and she is the one that got a stable job. Her husband hasn’t made any money for several years. We’ve all been telling him that he needs to get a stable job and get out of the loan industry.
They are a very nice couple, but they are young and very naive. They also got very greedy when they bought their home.
I know so many people that live beyond their means in California. It is just ridiculous. We’ve always put money into savings, no matter what kind of situation we’ve been in. (Which includes unexpectantly having twins that almost died and one that has brain damage).
I could rant some more about the whole housing and economic mess, but I won’t.
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