The news that Standard Life, Aviva and M&G Investments have suspended dealing in their U.K. property funds has both investors and fund managers worried about the consequences on the broader sector.
Shares of Standard Life were down nearly 5 percent on Tuesday. Meanwhile, shares across other asset management companies were sharply negative too. Aberdeen Asset Management saw its shares down nearly 8 percent, while Schroders was down nearly 6 percent.
Standard Life was the first to announce suspension on Monday. Aviva Investors and M&G Investments followed the lead to announce a temporary suspension on Tuesday. All three companies have attributed the decision to a massive increase in investor redemptions because of high levels of uncertainty in the U.K. commercial property since the outcome of the referendum on June 23.
While all three companies have claimed that the decision was taken in order to protect the interests of investors who may be negatively impacted by this, the fear that this may be followed by more property funds has started to worry many.
"Redemptions have now reached a point where M&G believes it can best protect the interests of the funds' shareholders by seeking a temporary suspension in trading. This will allow the fund manager time to raise cash levels in a controlled manner, ensuring that any asset disposals are achieved at reasonable values," M&G said in a statement.