Aviva’s property fund closure is not expected to affect the industry, according to experts.
Ryan Hughes, head of active portfolios at AJ Bell, comments on the announcement to close the Aviva Property fund: “News that Aviva has taken the decision to wind up its Property fund may come as a surprise to some investors given just about all of the sector has now reopened but the Aviva fund was in a weaker position than others given its relatively small size at under £400m and very low number of underlying properties. Any move to reposition to fund to raise liquidity was always likely to make the fund unviable should a number of underlying investors want to redeem as was highly likely and therefore it seems prudent for Aviva to decide to wind up the fund. The key for Aviva now is to ensure that investors receive clear communication on the winding up process and that timescales are well managed to ensure that investors don’t have to wait any longer than is necessary to access their funds.
“Looking ahead, while other funds have managed to reopen, there remains a question mark over the future of property funds given the FCAs review into the sector, its liquidity and the future shape of the long term assets funds. There is hope that some clarity will come later in the year and investors will need this to have any kind of confidence in the funds they hold and the structures they operate in.”