'Turbulent market' sees Kames property income fund suspended on valuation concerns
Kames Property Income and its feeder funds have been forced to suspend as a result of current “turbulent market conditions” making it impossible to accurately value property holdings, Professional Pensions' sister title Investment Week has learned.
In a statement to investors Kames Capital said the property income fund's standing independent valuer CBRE had made the judgement that it could not accurately price the holdings and, in accordance with collective investment scheme rules, it had made the recommendation to close.
From 12pm yesterday (16 March) Kames, which has made the Financial Conduct Authority aware of the situation, began blocking any instructions to purchase, sell or switch shares or units in the funds under the management of Richard Peacock and Karen Fox.
Kames told investors: "The challenges in accurately pricing properties is an issue for the entire property investment sector. This is due to a number of specific events that have combined to increase the level of uncertainty in stock markets, which in turn has led to periods of significant selling as we have seen in recent weeks.
"Chief among these events is the ongoing coronavirus crisis, which I know is a real concern for all of us. At the same time, we have had to contend with a sharply lower oil price as well as the impact of the ongoing Brexit negotiations. These issues are affecting all areas of the stock market, including property investing."
As in previously seen fund suspensions, the fund manager told investors it will review the suspension every 28 days.
Commenting on the suspension further, Kames said that a "continued market volatility and uncertainly for property funds" since the 2016 Brexit referendum which has been exacerbated by the coronavirus outbreak "makes it difficult to provide a true value for the funds underlying assets".
It added: "These issues are affecting all areas of the investment market including equities, fixed income and property investing.
"During the suspension we will continue to provide investors with regular updates on developments."
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