The latest bout of soul-searching over UK open-ended property funds has reignited a debate that has simmered since the Brexit referendum shock of 2016: are the periodic suspensions, gating mechanisms and redemption queues that plague these vehicles a structural bug crying out to be fixed, or an unavoidable feature of matching illiquid bricks-and-mortar assets with investors who expect daily liquidity? The latest analysis suggests the industry has been asking the wrong question entirely — and that reframing the issue has significant implications for how institutional and retail capital approaches UK real estate over the coming cycle.
UK Property Funds' Liquidity Trap: Design Flaw or Necessary Trade-off?
The recurring gating of open-ended property funds isn't a malfunction — it's the price of daily liquidity on illiquid bricks and mortar.