A rush to withdraw money from its commercial property funds has forced Scottish Equitable to introduce delays of up to 12 months for its customers.
A rush to withdraw money from its commercial property funds has forced Scottish Equitable to introduce delays of up to 12 months for its customers.
It affects investors in the Scottish Equitable Property fund, Select Reserve fund and Select Distribution fund.
It affects investors in the Scottish Equitable Property fund, Select Reserve fund and Select Distribution fund.
Aegon UK, which runs the fund, blames the rush to the exits on concerns about the US sub-prime mortgage collapse, recession worries and interest rates.
Aegon UK, which runs the fund, blames the rush to the exits on concerns about the US sub-prime mortgage collapse, recession worries and interest rates.
Friends Provident took the same action with its property fund last month.
Friends Provident took the same action with its property fund last month.
Regular income payments, retirements and death claims will not be affected.
Regular income payments, retirements and death claims will not be affected.
As real estate can take months to sell, property funds keep a proportion of their assets in cash to pay any investors who want to leave.
As real estate can take months to sell, property funds keep a proportion of their assets in cash to pay any investors who want to leave.
But if unexpectedly large numbers of investors want to withdraw their money the fund can be forced into selling property cheaply because they need a quick sale.
But if unexpectedly large numbers of investors want to withdraw their money the fund can be forced into selling property cheaply because they need a quick sale.
"The level of withdrawals from our property funds has reached the stage where we now have to sell properties to raise cash to meet the requests for payments out," the company confirmed.
"The level of withdrawals from our property funds has reached the stage where we now have to sell properties to raise cash to meet the requests for payments out," the company confirmed.
Scottish Equitable, which was founded in 1831, has its headquarters in Edinburgh.
Scottish Equitable, which was founded in 1831, has its headquarters in Edinburgh.
Are you affected by this story? Are you an investor in Scottish Equitable? Are you concerned by these withdrawals from Scottish Equitable's property funds?
