The FCA's controversial open-ended property fund changes could be a sensible move long term, according to Cedric Bucher, CEO of property firm Hearthstone Investments.

The FCA recently announced a consultation on a possible requirement for investors in open-ended property funds to give notice before their investment is redeemed.

The move would be aimed at improving property fund liquidity and avoiding excessive numbers of property fund suspensions.

The regulator was reacting to recent retail property fund suspensions following volatility during lockdown and before. Critics of the suspensions said they created unnecessary 'noise' to the detriment of the whole asset class.

In an article for the latest Financial Planning Today Magazine, Mr Bucher says while many have questioned the proposal he welcomes the change and says that he thinks long-term property investors will enjoy the prospect of enhanced expected returns due to higher allocations to property and reduced cash buffers.

He points out that European fund experience appears to favour a notice period.

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