Three more U.K. property funds halted trade on Wednesday, amid renewed turmoil following the U.K.'s vote to leave the European Union (EU) in June.
Henderson Global Investors, Columbia Threadneedle and Canada Life suspended dealings in U.K. property funds on Wednesday. They joined company with Aviva, M&G Investments and Standard Life, which did so on Monday and Tuesday.
"Despite a strong underlying portfolio, the decision was taken due to exceptional liquidity pressures on the funds, as a result of uncertainty following the EU referendum and the recent suspension of other direct property funds," Henderson said in a media release.
The funds that halted trading didn't have the liquidity to allow investors to redeem their money, the co-founder of fund manager SCM Private told CNBC on Wednesday, before the news from Henderson and Columbia Threadneedle.
Gina Miller - who is also a campaigner against industry misconduct - warned that some CEOs were acting in a manner reminiscent of the months leading up to the financial crisis of 2008.
"They knew Brexit was going to happen (immediately after the vote). They knew they should be looking at the valuations and the next morning ... they did absolutely nothing," Miller said.
"What you needed to do was actually suspend the fund in our view and look at re-valuing or waiting for an independent valuation," she said.
A spokeswoman for Standard Life stressed that this issue related to just one real estate fund and the suspension was requested to protect the interests of all investors in the fund. She added that the £2.9 billion fund held 13 percent cash at 31 May 2016 which she said was normal or average for a real estate fund. "It's also important with such low interest rates that a real estate fund doesn't hold too much cash as its aim is to invest in real estate (not cash) in order to provide returns for investors."
M&G and Aviva did not immediately respond to a request for comment.
Aviva early on Wednesday sought to reassure investors by saying its fundamentals were sound. News that it had suspended dealing in their U.K. property funds unnerved investors on Tuesday and sent shares in other asset managers down sharply too.
Miller argued that these funds were priced daily, but didn't have the daily liquidity. "They didn't have enough cash for the people who were rushing for the door," she said.
M&G said in a statement that the temporary suspension of trading in its property fund would allow the fund manager to raise cash levels "in a controlled manner, ensuring that any asset disposals are achieved at reasonable values."
Similarly, Aviva Investors said the suspension would give investors "greater control in managing cashflows and conducting orderly asset sales".
Miller's concern centered on the fact the fund managers were holding physical property - warehouses and office blocks - that were not easy to sell. "I'm not sure how they are going to sell these properties because you have got an issue where the more you've got coming to the market ... it's more and more difficult to sell them."
Indeed, Standard Life warned that the selling process for real estate can be lengthy as the fund manager needs to offer assets for sale, find prospective buyers, secure the best price and complete the legal transaction.
"Unless this selling process is controlled, there is a risk that the fund manager will not achieve the best deal for investors in the fund, including those who intend to remain invested over the medium to long-term," it warned on Tuesday.
Miller also said that retail investors had been sold a liquid fund which was in fact illiquid, and accused the U.K. regulator of failing to look at property funds.
"We have a cultural issue ... it's not just the regulators but also the CEOs of these companies," Miller said.
"We saw the aftermath of the financial crisis, we saw what happened to these property funds and yet they have not put buffers in place and they are not holding more cash. They are not behaving any differently than they did in the financial crisis."
The Bank of England's Financial Conduct Authority Chief Andrew Bailey said on Tuesday that the purpose of the suspension was to create a pause to revalue underlying assets.
He added the FCA was in very close contact with firms in the real estate sector and added there were issues in the design of real estate funds. He further added that his own feeling was that the structure of open-ended real estate funds needs to be reviewed.