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Wednesday, January 4, 2023

BlackRock Halts Withdrawals From £3.5 Billion UK Property Fund

(Bloomberg) — BlackRock Inc. has suspended withdrawal requests from traders in its £3.5 billion ($4.2 billion) UK property fund, in a transfer that highlights the sector’s ongoing challenges when markets are risky.

The world’s largest asset supervisor instructed purchasers within the BlackRock UK Property Fund up to now few days that it’ll defer redemption requests made on the finish of September 2022 and due round now, in line with an individual conversant in the matter. 

The fund relies in Jersey and is just open to skilled traders, together with a number of pension schemes that in current months have been shifting their portfolios into liquid property after months of market volatility left them overexposed to holdings which are tougher to promote. 

A spokesperson for BlackRock declined to remark. Reuters reported the information earlier. 

BlackRock and different asset managers beforehand restricted withdrawals from UK property funds in October. On the time the companies stated the transfer was unrelated to the sell-off in gilts following the UK’s “Mini-Funds” on the finish of September. 

UK property funds have suspended redemptions at instances of market stress in recent times, together with through the coronavirus disaster of 2020 and following Britain’s referendum to go away the European union in 2016. Some funds have put properties in these funds up on the market to satisfy traders’ want to money out. 

Promoting industrial actual property with a purpose to elevate money to pay out departing traders can take months if managers wish to keep away from fireplace gross sales. Some property funds for retail traders that gated following the Brexit vote in 2016 managed to reopen inside weeks whereas others remained shut for as a lot as six months.

© 2023 Bloomberg L.P.

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