BlackRock halts withdrawals from $4.2 billion U.K. property fund – Pensions & Investments
BlackRock has suspended withdrawal requests from investors in its £3.5 billion ($4.2 billion) U.K. property fund, in a move that highlights the sector’s ongoing challenges when markets are volatile.
The world’s largest asset manager told clients in the BlackRock UK Property Fund in the past few days that it will defer redemption requests made at the end of September 2022 and due around now, according to a person familiar with the matter.
The fund is based in Jersey and is only open to professional investors, including several pension schemes that in recent months have been shifting their portfolios into liquid assets after months of market volatility left them overexposed to holdings that are harder to sell.
A spokesperson for BlackRock declined to comment. Reuters reported the news earlier.
BlackRock and other asset managers previously limited withdrawals from U.K. property funds in October. At the time the firms said the move was unrelated to the sell-off in gilts following the U.K.’s “Mini-Budget” at the end of September.
U.K. property funds have suspended redemptions at times of market stress in recent years, including during the coronavirus crisis of 2020 and following Britain’s referendum to leave the European union in 2016. Some funds have put properties in those funds up for sale to meet investors’ wish to cash out.
Selling commercial real estate in order to raise cash to pay out departing investors can take months if managers want to avoid fire sales. Some property funds for retail investors that gated following the Brexit vote in 2016 managed to reopen within weeks while others remained shut for as much as six months.