Britain's M&G keeps freeze on $3.3 billion property fund

This post was originally published on this site

LONDON (Reuters) – British insurer and asset manager M&G (L:) will continue the suspension of its 2.5 billion pound ($3.30 billion) property funds, it said on Thursday, after selling 70.4 million pounds of real estate assets to raise cash.

M&G said on Dec. 4 that it was freezing the M&G Property Portfolio and its feeder fund after Brexit uncertainty and weakness in the retail sector led to a surge in investor requests to cash out.

The suspension follows the collapse of money manager Neil Woodford’s equity fund and comes as regulators seek changes to funds that invest in hard-to-sell assets such as property but enable investors to cash out at short notice.

M&G’s funds will reopen “once cash levels have been sufficiently restored”, the company said in a statement without specifying a date. It is required to update investors on the status of the fund every 28 days at least.

The asset manager, which split from parent Prudential (L:) in October, said it had completed the sale of a retail park in Edmonton, northeast London, for 51.4 million pounds and exchanged contracts on a property in Staines, southeast England, for 19 million pounds.

M&G said it had a further 67.2 million pounds in properties under offer or going through legal processes.

Seven property funds with a combined 18 billion pounds under management froze in quick succession after the Brexit referendum in June 2016.

Other property funds have said they are monitoring the market situation.

M&G’s funds had 4.8% of their assets in cash – a smaller cash buffer than other major property funds such as those run by Legal and General (L:) and Aberdeen Standard Investments (L:).

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Add Comment