M&G Investment has extended the suspension of its £2.5bn (€2.94bn) open-ended UK property fund to “protect the interests” of its investors
M&G Investment has extended the suspension of its £2.5bn (€2.94bn) open-ended UK property fund to “protect the interests” of its investors.
M&G said it was “making good progress” in raising cash to meet redemptions ahead of a reopening of the M&G Property Portfolio.
The fund was temporarily gated in December so it could raise cash without being forced to sell assets at discounts.
Cash represented 4.8% of the fund at the end of January and this is expected to rise to 16% when £245m of assets are sold.
M&G also said it was close to reducing the fund’s exposure to retail property from 32% to 38% – 80% of assets sold or due to exchange were in the sector.
A high exposure to retail was cited as one of the reasons the fund was forced to freeze in December, along with Brexit and “unusually high and sustained” outflows.
Values in the retail property sector in the UK are have been hit in recent months. Just today, Hammerson, a retail-focused real estate investment trust, announced today that it had seen £828m of value wiped off its portfolio by revaluations.
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.
M&G said the fund continued to be actively managed, with income payments and reporting as normal.
It is also continuing to waive 30% of the fund’s annual charge “in recognition of the inconvenience caused”.
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