M&G Property Fund Suspension

You may be aware that the above fund was temporarily suspended yesterday. We are in the process of identifying which of our clients may be affected by this announcement and will be writing directly to anyone who is invested in the fund in order to provide further information about what this means for them.

Why was the fund suspended?

M&G have given the following explanation in their announcement letter:

“In recent months, continued Brexit-related uncertainty and ongoing structural shifts in the UK retail sector have prompted unusually high outflows from our property fund for retail investors. Given that these circumstances and deteriorating market conditions have significantly impacted our ability to sell commercial property, we have temporarily suspended dealing in the interests of protecting our customers.

The assets owned by the M&G Property Portfolio, such as office buildings and shopping centres, are held for the long term and take time to buy and sell, making it difficult to immediately meet sudden and sustained levels of redemptions. Suspending the funds at this time will allow the fund managers, Fiona Rowley and Justin Upton, time to restore the cash levels by selling assets in an orderly manner and preserve value for our investors.

The decision to suspend was taken in agreement with the funds’ Depositary and we have informed the Financial Conduct Authority. We are unable to say how long the funds will be suspended for, but we will formally review the suspension on a monthly basis and will keep you updated via the M&G website. We will also write to you in advance to inform you when we will lift the suspension.”

What happens next?

M&G have confirmed that the funds will still be actively managed during suspension and that they will be waiving 30% of their annual charge, which will end when the funds resume dealing. Suspension will be formally reviewed on a monthly basis and they will inform investors if the level of discount changes. In all other respects, the funds will operate as normal.

Instructions to buy or sell units in the M&G Property Portfolio or the M&G Feeder of Property Portfolio will not be accepted until the suspension is lifted. M&G will continue to publish daily prices on www.mandg.co.uk but no instructions will take place at these prices while the funds are in suspension. We will update the M&G website with more information as soon as it is available.

More information

We will continue to monitor the situation and will keep our website updated with any developments as well as contacting affected clients directly. If you would like to discuss this further please contact your adviser or email info@aspirafp.co.uk.

Derek Miles
Managing Director

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