Posted on 12/02/2022 2:49:44 AM PST by EBH
The asset managers have imposed limits on withdrawals as pension funds seek to reduce exposure to real estate
BlackRock, Columbia Threadneedle and Schroders have put limits on the amount large investors can withdraw from their UK property funds, as pension clients look to cash in their holdings in less-liquid assets.
The move means pension funds — many of them having requested to pull their money from these property funds months ago in the wake of volatile markets and rising interest rates — will have to wait longer to be paid.
Columbia...(paywall)
(Excerpt) Read more at fnlondon.com ...
Cash in the fund at a level where future redemption requests cannot be met 'until a further orderly sale of assets has completed'
Wednesday October 12, 2022 8:03 am Columbia Threadneedle has frozen trading in one of its retail UK property funds after a depletion in the amount of cash held to pay back the rising number of investors wanting to exit.
In a statement issued on the evening of 11 October, the £492bn asset manager said it had suspended dealing in the £453m UK Property Authorised Investment Fund as well as its feeder, the UK Property Authorised Trust.
Apologies for the paywall, but I cannot find this information anywhere that is not paywalled off.
The crash in the UK has started.
Blackstone limits REIT withdrawals
https://therealdeal.com/2022/12/01/blackstone-limits-reit-withdrawals/?utm_source=internal&utm_medium=after_article&utm_campaign=related_article
Blackstone’s massive real estate fund is limiting withdrawals after a breach of its quarterly repurchase limit.
Blackstone Real Estate Income Trust is tightening redemption requests for the remainder of the quarter, Bloomberg reported. The REIT is already warning that repurchase requests could be limited or suspended in the first quarter.
Withdrawal demand recently exceeded 2 percent of the net asset value monthly limit and 5 percent of the quarterly threshold, according to the REIT. The withdrawal structure of the fund kicked in at that point to prevent a liquidity mismatch.
A rocky ride appeared to be on the horizon for BREIT. As of last month, inflows were slowing down and redemptions were rising. Rising interest rates are hindering the fund’s ability to make acquisitions and wealth advisors started cautioning clients against illiquid investments.
Basically this is a run on a bank… so to speak.
Run on investments that do not have sufficient liquidity.
[The crash in the UK has started.]
Just waiting until every government on the face of the Earth offers cryptocurrency with a new “digital coin”. /shiny side out
Which will then merge into a Global “Currency” one day. /just a guess
A long time off? Well, let’s see how many cryptocurrencies are still standing at the end of even 2023.
Is it possible that UK investors are following in Florida's lead (Florida Pulls $2 Billion From BlackRock in Largest Anti-ESG Divestment).
BTW, the concern about Woke investments has to do with more than just disagreement with Woke politics. As we know, "go Woke, go broke." Just take a gander at Disney.
Couldn't read the article in detail because of paywall.
Try post #3,
Finding any of this not behind a paywall is difficult. Probably find it later today on regular news outlets.
Cant pay up because of corruption and abuse, here is a shiny new nickel you can invest in, don’t look back, don’t look behind the curtain just be assured we will invest your money we lost on your behalf in a new scam with more control over you
Could happen very quickly too
IMHO
bmp
My understanding is once this started in the UK, the United States is 6-8 weeks away?
But, who really knows. There is or seems to be a lot happening that they are trying to hide from the average person. Good reason will be civil unrest.
Part of me wants to believe we will get through this ...other part is sitting back in a sort financial horror watching this all unfold and measuring events against historical declines.
Remember...it happens in waves. Real declines happen in waves, not crashes. Crashes are recoverable, declines are permanent.
limiting client withdrawals? who do they think they are, a crypto exchange?
I think Blackrock and Blackstone are 2 different companies.
Anyone else wondering if any of that money supposedly going to Ukraine might laundered through Ukraibe and going to certain institutional investors.
Reason I wonder is that latest deal, the one with Raytheon. Raytheon’s top institutional investors, for example, include Blackrock.
Florida pulls 2 billion...
The Raytheon deal is worth 1.2..
The £2.7bn Schroders Capital UK Real Estate fund received redemption requests worth £65.3mn in the second quarter of this year © REUTERS
UK property funds limit withdrawals as pension funds shift assets on twitter (opens in a new window)
Chris Flood, Josephine Cumbo, George Hammond and Adrienne Klasa OCTOBER 3 2022
Three UK asset managers have said they are unable to handle heavy demand from investors seeking to withdraw from property funds, in a sign of how the fall in government bond prices is forcing pension funds to reallocate holdings.
Schroders said it will make some redemptions originally due on Monday as late as July next year, while Columbia Threadneedle said volatile market conditions had forced it to switch from daily to monthly payouts. At the same time, BlackRock also imposed new restrictions on withdrawals.
Funds that own hard-to-sell assets have struggled this year when volatility across stocks and bond markets has pushed investors to demand cash back in a hurry.
A liquidity crisis in the UK last week sparked by plunging gilts prices has worsened the situation for some asset managers. Defined-benefit pension schemes, which are major investors in UK institutional real estate funds, have been rapidly selling a broad range of assets to meet demands for collateral.
“It’s a fairly feeble market and you’ve thrown in some volatility. Shifting to monthly redemptions [from daily] reduces your need to firesale assets,” said one adviser to property funds.
Calum Mackenzie, investment partner with Aon, the pension consultants, added, “I think this is part of a longer-term trend by pension funds to [cut risk] by selling off the less liquid assets . . . This trend is now being exacerbated by last week’s short-term liquidity rush by pension funds.”
UK pension funds have been cutting real estate holdings for several months as rising interest rates and slowing activity have weighed on the property market. Tumbling prices of UK government debt have also increased the proportion of funds’ portfolios in real estate, prompting some to reduce their exposure.
Recommended
Financial services
Asset managers cut debt in pension scheme investing strategies
These forces have intensified at a point when conditions in private markets including equity, real estate and credit, are already fraught. A sharp deterioration in lending conditions has made it difficult to get deals done in unlisted assets, according to industry participants.
The £2.7bn Schroders Capital UK Real Estate fund received redemption requests worth £65.3mn in the second quarter of this year, which were due to be paid by October 3. Schroders has paid £7.8mn towards meeting the withdrawal requests and said the outstanding balance would be deferred until “on or before” July 3 next year, in line with rules that allow it to push back redemption requests 24 months.
“It is expected that the deferred redemptions will be paid following successful completion of future asset disposals,” said Schroders.
It is in the process of selling Jubilee House, a tower block redevelopment in Stratford, east London, that it bought in 2013 for £11.9mn. Schroders has signed a contract to sell it for £63mn in a deal that is expected to be completed by April 2023.
Columbia Threadneedle has also introduced new arrangements for redemptions for the £2.3bn Threadneedle Pensions Pooled Property fund, which means investors will be able to make withdrawals on a monthly basis rather than daily, citing “liquidity constraints resulting from the recent market volatility and a subsequent increase in redemption requests”.
BlackRock, the world’s largest asset manager, has also imposed redemption restrictions on the £3.5bn BlackRock UK Property fund after receiving significant withdrawal requests in the second quarter.
These restrictions echo previous crises when asset managers imposed “gates” to prevent investors from making withdrawals from daily traded property funds in the wake of the Brexit vote and during the early months of the coronavirus pandemic in 2020. In both of those instances, professionals valuing assets held by the fund struggled to put an accurate price on commercial real estate projects.
https://www.ft.com/content/34f679be-714e-4201-a8b3-cc0e96acc1a1
You are absolutely correct. I commented only after having read the title of this thread and the blurb at source.
Yes, that is correct. Although they are or used to be related.
BOTH have put restrictions on withdrawals though at this time.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.