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LGIM cuts UK property fund portfolio value by further 10%, F&C joins the club

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Legal & General Investment Management (LGIM), the insurance arm of Legal & General, has announced that it has cut the value of its £2.3 billion U.K. property fund by a further 10 percent. The company had earlier made a 5 percent valuation cut as a cautious move in the current market environment.

"At this time it is still difficult to predict the exact impact of the vote to leave and subsequent market events on commercial property values. In the interests of treating customers fairly, we have made a further fair value adjustment of -10 percent, so that the underlying property assets of the U.K. Property Fund (PAIF) and the U.K. Property Feeder Fund are now subject to a total fair value adjustment of -15 percent, a spokesperson at LGIM told CNBC via email.

The new prices were applied from the valuation point on 6 July and the adjustment has been made considering the broader market response and other economic metrics.

"We will continue to monitor market events closely, using all available sources and our experience of the property market," the spokesperson said.

L&G's shares are down more than 27 percent since June 23 - the referendum day.

A number of U.K. property funds have suspended dealing or made changes to fair value adjustments attributing it to the move difficult market conditions, following the Brexit vote on June 23. F&C Investments, run by BMO Global Asset Management, also announced a cut to the price of units in its fund by 5 percent after an increased number of redemption requests from its customers.

A fair value price reduction means the fund is priced in a way that ensures investors receive a price which is in line with what is expected to be realized from a sale of the properties, Aegon Investments explains on its website. The process is implemented in order to ensure that those investors leave the fund and those remaining are treated fairly.

Seven U.K. property funds have now suspended dealing or made valuation adjustments on their U.K. property funds. These include Standard Life, Aviva, M&G Investments, Henderson Global Investors, Columbia Threadneedle, Canada Life and Aberdeen Asset Management.

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