THE first concrete signs of post-Brexit financial stress in Britain emerged this week. The asset-management arm of Standard Life, an insurer, suspended redemptions from its £2.9 billion ($xx billion) British property fund. It was followed by a flurry of rivals: Aviva, Canada Life, Columbia Threadneedle, Henderson and M&G.

The decisions highlighted the mismatch between the open-ended nature of such funds—allowing retail investors to buy and sell on a daily basis—and the illiquid assets they hold: office blocks and shopping centres. But the announcements also reflected the shock to the property market caused by the Brexit vote. London has attracted lots of businesses both because of its perceived openness and because it provides an English-speaking base for doing business in the EU; the vote has caused a reassessment of its attaractiveness as a corporate home.

According to the Financial Times, German and Spanish buyers pulled out of £650m-worth of property deals in the week after the referendum. Russell Chaplin of Aberdeen, another asset manager, says many deals had a “Brexit clause” allowing...Continue reading