Fund activity stagnates in Q4 2011

Capital flows in and out of 65 UK funds were broadly flat and volumes were down at the end of last year. Association of Real Estate Fund figures for Q4 2011 recorded a small net outflow, of -£4.5m, slightly below the third quarter, when the net outflow was -£10m.

“This is a result of less activity in the market,” AREF said. New money raised in Q4 2011 was £271m, 41% lower than the £471m investors put into funds in the previous quarter. Some £67m of the Q4 inflow was new money. Redemptions decreased correspondingly, from £480m in Q3 2011 to £280m in Q4.

Agents said that open-ended funds were selecting properties for sale to manage liquidity. Owing to the stronger first half, 2011’s net capital flow was positive, but at £467m, the lowest figure for two years.