Property fund trade body objects to Ucis ban

The Association of Real Estate Funds has criticised the FSA’s plans to restrict the promotion of unregulated collective investment schemes (Ucis).

The trade body for the UK’s unlisted real estate funds industry believes the ban on promotion will prevent most sophisticated investors and high net worth individuals from investing.

The association’s chief executive John Cartwright says: “Whilst we agree that ordinary retail investors need to be protected from unsuitable products, it would be unfair to prevent access for all investors – real estate UCIS are often very suitable for sophisticated investors and high net worth individuals.

“The real estate asset class is attractive because it helps to reduce the risk of an investor’s portfolio through diversification.”

He adds: “We believe that promotion of real estate UCIS to sophisticated investors and high net worth individuals should be allowed to continue otherwise these investors will have no choice but to accept the performance drag of retail property funds.

“Regulators require ordinary retail investors to be protected with instant access to redemptions but the high cost associated with providing this liquidity can result in a drag on performance.”