Real estate funds are to be scrutinized by a trade body in light of the suspension in UK property funds that followed the UK’s Brexit vote.
The Association of Real Estate Funds (Aref) has commissioned John Forbes, an independent consultant who has also authored a previous Aref report called ‘Unlisted funds, lessons from the crisis’, to “assess the impact of the referendum result on the real estate market”.
He will also look to see if improvements can be made to fund structures, and consider if some areas of the market would benefit from best practice guidelines.
The suspension in property fund dealing following the Brexit vote has called into question whether closed end funds are suitable for investing in illiquid assets such as property.
John Cartwright, chief executive officer of Aref, said: “To ensure that our industry continues to provide comprehensive investor protection and deliver the best possible outcomes for its clients, we thought it was an appropriate time to look back at how the market reacted to the result and see where, if any, improvements to fund structures and processes could be made.”
John Forbes, Founder of John Forbes Consulting LLP, said: “It is vital that the investment models available to retail and institutional clients provide protection to all investors at moments of market stress and illiquidity.”
The research will be published in the first quarter of 2017.
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