M&G will continue freeze of its flagship property fund
M&G is continuing the suspension of its £2.5bn property fund despite making good progress in selling some of the fund’s assets.
M&G suspended trading in its flagship property fund in December after investors rushed to withdraw their money.
The asset manager blamed the unusually high outflows on Brexit-related political uncertainty, which had made it difficult to sell commercial property.
M&G today told investors that continuing the suspension would “best protect the interests of its investors” as it raises cash to meet potential redemption requests.
The fund will cut its retail holdings to 32 per cent from 38 per cent as the sector accounts for 80 per cent of assets the fund has sold or is “on course to exchange”.
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The asset manager said £245m of assets were in solicitors’ hands or under offer, and sales would increase the fund’s cash position to 16 per cent from 4.8 per cent.
Tony Brown, global head of M&G Real Estate, said: “We are making good headway in a more liquid market than last year and every effort is being made to ensure we can reopen as soon as possible – we appreciate your patience in this matter.”
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It is not the first time M&G has suspended the fund. It froze the fund for four months following the Brexit referendum in 2016, along with other asset managers after property funds suffered heavy losses.
M&G said the fund continues to be actively managed during its suspension, with income payments and fund reporting as normal.