M&G suspends open-ended UK property fund ahead of closure
M&G global head of product and distribution Neal Brooks added the firm «does not foresee a future» for the open-ended direct property structure.
The move comes after years of dwindling assets following the most recent raft of retail property funds suspensions, which saw most UK open-ended property funds shutter, citing material valuation uncertainty as a result of Covid-19.
M&G Property Portfolio, however, suspended its redemptions earlier than most, applying the restrictions in December 2019, attributing the move to «Brexit-related political uncertainty and ongoing structural shifts in the UK retail sector».
At the beginning of 2019, the fund held £3.5bn in assets under management, which fell to £2.5bn at the time of suspension.
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Following a 17-month suspension, the fund reopened with a cash level of 33.2% in order to manage redemptions.
Since this was lifted, AUM has continued to dwindle on the back of consistent redemptions, falling roughly three-quarters over the period to just £567m on 17 October 2023, according to M&G's website.
Orders place after midday today (19 October) will not be accepted, and the fund house is seeking regulatory approval from the Financial Conduct Authority to wind up the vehicle.
M&G expects the process to take approximately 18 months, with the first distribution available to investors shortly after FCA approval is granted.
The annual charge on the fund has been reduced by 30% as of today, with all fees on cash held in the fund removed entirely.
Income distributions will be paid as normal.
Speaking to Investment Week, M&G global head of product and distribution Neal Brooks explained the fund closure was a result of structural
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