Corporate

 FCA comments on measures to manage liquidity in real estate funds in the current climate

In a recent  announcement the UK Financial Conduct Authority (FCA) noted that, against the background of the coronavirus pandemic, a number of standing independent valuers of commercial real estate funds had determined that there was material uncertainty over the value of commercial real estate (CRE).  In such situations, a fair and reasonable valuation of CRE funds cannot be established.  As a result, some managers of open-ended CRE funds have temporarily suspended dealing in units of these funds and others are likely to follow for the same reason.

FCA noted that suspensions can be used by managers of open-ended funds, in line with their obligations under applicable regulations. In the current circumstances, FCA considers that suspension is likely to be in the best interests of fund investors. Click here to access the FCA announcement.

Click here for our report on FCA’s expectations for the boards of open ended funds as they seek to manage liquidity generally.

Corporate and Commercial