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M&G kills off £565m Property fund

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M&G kills off £565m Property fund

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M&G is to droop and wind up its troubled M&G Property Portfolio Fund and sister fund, the M&G Feeder of Property Portfolio.

M&G mentioned that it will shut the funds resulting from, “declining curiosity in open-ended day by day dealing property methods from UK retail buyers.”

The fund supervisor mentioned the transfer was within the “finest pursuits” of buyers and is topic to regulatory approval.

M&G has suspended dealing in shares of the funds at present pending closure and is writing to shoppers in regards to the subsequent steps.

The fund, together with a number of different property funds run by opponents, was suspended in 2019 after a wave of redemptions hit the property fund sector.  M&G suspended the fund on 4 December 2019 and it remained suspended for 18 months. On the time the fund supervisor blamed Brexit-related uncertainty and ongoing structural shifts within the UK retail sector.

The fund has £565m invested, a few quarter of the £2bn invested within the fund in 2019 when it was final frozen.

M&G mentioned in a press release at present: “As soon as a preferred sort of auto for UK retail buyers to entry actual property, the IA UK Direct Property sector has seen persistent outflows over a number of years.

“Because the fund has continued to lower in dimension, it has decreased the supervisor’s long-term potential to take care of a diversified portfolio with out incurring excessive, on-going transaction prices required to configure the portfolio – significantly in opposition to a backdrop of continued and probably accelerating outflows.”

As soon as regulatory approval is granted the fund will start promoting off belongings, a course of it believes will take 18 months to finish. All proceeds can be returned to buyers minus expenses however M&G mentioned that in recognition of the closure, M&G has decreased the Annual Cost by 30% as of at present and abolished it totally on money. Earnings distributions will proceed to be paid as regular.

Neal Brooks, M&G’s international head of product & distribution, mentioned: “Once we launched this technique in 2005, we – alongside our friends – offered entry to an asset class which had traditionally been unavailable to long run savers in a pooled construction. The market has since developed.

“Declining retail investor curiosity throughout the sector for this fund construction, alongside uncertainty round their future composition is posing challenges to the longer term viability of funds just like the M&G Property Portfolio – significantly for these buyers who require day by day liquidity. We thought-about numerous choices, however consider that is the best determination for our buyers.”

Dealing within the funds was suspended at 12 midday at present (Thursday 19 October 2023). Directions to purchase, promote or swap in or out of shares/models within the funds will now not be accepted, M&G mentioned.

• Advisers can contact the the Monetary Adviser Helpline staff on 0800 328 3191 from 8am to six pm, Monday to Friday.




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