How Fund Managers Can Manage Redemptions in 2026

Liquidity has become one of the most pressing challenges for unlisted property fund managers in Australia and New Zealand. As interest rates rise again in 2026, investors are increasingly asking a question many had parked during the easing cycle:

When can I get my money out?

For fund managers, the answer is no longer straightforward, and how you respond can directly impact investor retention, portfolio performance, and long-term growth.

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What Is Liquidity in an Unlisted Property Fund?

In simple terms, liquidity refers to how easily an investor can exit their investment and access their capital.

Unlike listed REITs, unlisted property funds are inherently illiquid. Investors typically need to wait until:

• The fund reaches maturity, or
• The manager sells underlying assets

This structure works well in stable conditions, but becomes a significant pressure point when market dynamics shift.

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Why Liquidity Is a Growing Problem in 2026

After interest rate cuts in 2025, markets briefly stabilised. However, renewed rate increases in early 2026 have quickly changed investor behaviour.

Rising rates impact unlisted property funds in three key ways:

• Valuation pressure: Higher rates compress asset values, particularly across commercial property
• Opportunity cost: Cash and fixed income become more attractive, making illiquid investments harder to justify
• Investor scrutiny: SMSFs and family offices reassess whether their capital is working efficiently

The result is a familiar, but uncomfortable dynamic:
Redemption demand increases at exactly the wrong time to sell assets.

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The Risk of Forced Asset Sales

When investors seek to exit and liquidity options are limited, fund managers can face a difficult choice:

• Delay redemptions and strain investor relationships, or
• Sell assets into a cautious market

Forced sales often lead to:

• Discounted valuations
• Reduced returns for remaining investors
• Long-term damage to investor trust

This is a scenario many fund managers are actively trying to avoid in the current cycle.

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A Better Approach: Proactive Liquidity Planning

The fund managers navigating this environment most effectively are not reacting to redemption requests - they are planning for them.

Proactive liquidity management means giving investors a clear, structured pathway to exit before pressure builds.

Importantly, when investors know liquidity is available:

• They are more likely to remain invested
• Perceived risk decreases
• Trust in the fund manager increases

In many cases, the fear of being locked in is more damaging than illiquidity itself.

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What Is a Periodic Liquidity Event?

A Periodic Liquidity Event is a structured opportunity for investors to buy and sell fund units directly with each other.

Instead of selling underlying property assets, the fund manager:

• Creates a defined trading window (e.g. quarterly or biannually)
• Sets the rules and parameters
• Facilitates transactions between willing buyers and sellers

Key benefits:

• No forced sale of assets
• Portfolio strategy remains intact
• Fair outcomes for both exiting and remaining investors
• Improved investor confidence and retention

Liquidity becomes a designed feature of the fund, rather than a reactive measure.

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How Secondary Markets Solve Redemption Pressure

Secondary markets enable investors to trade existing fund units, creating liquidity without disrupting the underlying portfolio.

This approach fundamentally changes the dynamic:

• Investors who need to exit have a clear pathway
• Investors who want exposure can enter
• Fund managers avoid selling assets at the wrong time

For funds with larger or more active investor bases, this can also evolve into continuous trading environments, offering even greater flexibility.

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How Syndex Enables Liquidity for Unlisted Funds

Syndex enables unlisted property fund managers to run secondary trading events, allowing investors to buy and sell units directly with one another, without requiring asset sales.

Two common models include:

1. Periodic Trading Events

• Scheduled liquidity windows (e.g. quarterly)
• Concentrated activity and price discovery
• Manager-controlled structure

2. Continuous Market

• Always-on trading environment
• Greater flexibility for investors
• Suited to larger, more active funds

Across both models, the outcome is the same:

• A transparent and fair exit pathway for investors
• Protection of the underlying asset base
• Reduced pressure on fund managers during volatile periods

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The Strategic Importance of Liquidity in 2026

With interest rates expected to remain elevated and investor expectations continuing to evolve, liquidity is no longer a “nice to have”.

It is becoming:

• A key differentiator in attracting capital
• A core component of investor trust
• A risk management tool for fund managers

Funds that embed liquidity into their structure will be better positioned to:

• Retain investors
• Avoid distressed asset sales
• Compete in an increasingly sophisticated capital market

Rising interest rates are increasing redemption pressure in unlisted property funds.
Fund managers who implement structured liquidity solutions - such as periodic liquidity events or secondary markets - can provide investor flexibility without compromising their portfolio.

If you manage an unlisted property fund and are considering how to address investor liquidity, now or in the future, it is worth exploring structured secondary market solutions before pressure becomes urgent.