Interactive Investor

ii comment on Kames Property Income Fund suspension

Our head of investment Rebecca O'Keeffe shares her thoughts on open-ended property funds.

18th March 2020 08:36

Rebecca O'Keeffe from interactive investor

interactive investor's head of investment Rebecca O'Keeffe shares her thoughts on open-ended property funds.

Commenting on the suspension of the Kames Property Income and its feeder funds, Rebecca O’Keeffe, Head of Investment, interactive investor, says: “Just a few months on since M&G, and four years on since we saw several property funds suspend in the wake of the referendum, here we are again.

“Dramatic market falls will put pressure on open-ended funds which invest in illiquid assets and yet again this shines a light on the issue of liquidity and the structure of funds.

“No structure is perfect, but the closed-ended structure of investment trusts is far superior when it comes to investing in illiquid assets such as commercial property.

“Of course, it is very reasonable that the combination of extreme markets and extraordinary social circumstances make it exceptionally difficult to value property, in particular on the retail or hospitality side. But we still think an open-ended fund is the wrong way to gain exposure to this asset class. We would caution against panic selling, but at least with investment trusts, if you do need to head for the emergency exit, you can.”

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