Wednesday, July 13, 2016

Subprime 2.0: Real Estate Fund 
Redemption Suspensions Are Spreading
FT article highlights the new emerging subprime crisis .. "Eight companies, including Standard Life, Henderson and M&G, barred investors from selling out of their property funds amid fears about falling commercial real estate values following Britain’s vote to leave the EU .. Many of those investment companies, however, operate separate products that are also invested in the funds now closed to investor redemptions, and could block investors from pulling their money .. A prominent UK fund manager, speaking on condition of anonymity, said: 'When you start getting daily trading funds-of-funds investing in daily trading funds that are invested in illiquid assets, that seems to be layering up potential liquidity risks .. Investors need to consider the impact on funds that are caught with material investments in the gated property funds."
link here to the article

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