Why don’t liquidity shocks shock us anymore?

Like many people, I can remember exactly where I was when the shockwaves of the EU referendum result rippled through Friday 24 June 2016 and the FTSE 100, the pound and the leadership of the Conservative Party all abruptly collapsed. 

However, perhaps like slightly fewer people, I also distinctly recall the events of Tuesday 5 July 2016, just over a week later. This is because Aviva Investors, M&G Investments and Henderson Global all gated their UK retail property funds following a surge in redemption requests in a dramatic domino cascade that followed Standard Life suspending its fund the day before. This also preceded three further funds managed by Columbia Threadneedle, Canada Life and Aberdeen Asset Management taking the same action the following day.

I remember this so clearly because it had a hugely significant impact on my professional sphere, made national headlines, and prompted both serious debate and an FCA review about whether it was appropriate to have open-ended retail funds invested in such fundamentally illiquid assets. To paraphrase Ron Burgundy, it was kind of a big deal. It was also kind of a big deal when a similar chain reaction took place just under four years later amid the sudden halt of markets during lockdown and the same concerns resurfaced with equal force.

Now, in 2026, we find ourselves once more in a time of geopolitical and market uncertainty. Funds across various sectors that have been suspended, had redemptions capped, or have been wound down entirely. The difference? It is no longer that big a deal and another suspension barely registers beyond the trade press.

This leaves us with a big question. Is this no longer a big deal because the underlying problems have been fixed, or have we simply grown used to them in an age of permacrisis? The answer, uncomfortably, looks like the latter.

The fundamental tension has not gone away. Open-ended property funds still offer the promise of liquidity, often daily, while investing in assets that can take months, if not years, to sell without taking a hit. When markets turn, that mismatch does not disappear. It comes sharply into focus. Investors head for the exit, assets cannot be sold quickly enough and the gates come down.

What has changed is not the structure, but how we talk about it. Gating is no longer seen as a breakdown of the system, but increasingly as part of how it works. What was once treated as failure is now being quietly accepted as a feature.

That shift should give us pause. Familiarity has a habit of dulling scrutiny. If suspensions are expected, they risk being questioned less by regulators, advisers and, most importantly, investors. Yet for those investors, the consequences remain the same: access to their capital can disappear precisely when they might need it most.

There has been progress. Notice periods, liquidity tools and better disclosures all help. But they manage the problem rather than solving it.

Which brings us back to the need for clarity. Retail investors need to understand not just that gating can happen, but that under certain conditions it probably will. Liquidity in these structures is not guaranteed, but conditional.

And this may not be a story confined to property. As private credit continues its push into retail markets, some familiar themes are starting to reappear. Even its most senior proponents such as Jamie Dimon have struck a more cautious tone, warning that losses may yet exceed expectations. But the more relevant parallel lies elsewhere. These are assets that are illiquid, infrequently priced and increasingly wrapped in structures offering periodic access to capital. As redemption pressures build and withdrawal limits begin to bite, the same underlying tension is starting to show through. The risk is not necessarily that the system fails, but that investors once again discover at the point of stress that liquidity was never quite what they thought it was.

The industry, it seems, has made its peace with gating. The question is whether investors have. Because if we no longer bat an eyelid, it should not be because the problem has been solved. It should be because it has finally been properly explained.