4th Dec 2019 15:35
(Alliance News) - M&G PLC on Wednesday said it is temporarily suspending trading in shares of its property portfolio fund with immediate effect due to "unusually high" outflows, Brexit-related political uncertainty and changes in the UK retail sector.
The portfolio has investments in 91 UK commercial properties across the retail, office and industrial sectors and invests on behalf of UK retail investors. At October 31, the property fund had GBP2.54 billion assets under management.
The FTSE 100-listed firm, fresh from its October demerger from Prudential PLC, said it has been "difficult" for the company to sell property and has turned to a suspension to protect its customers' funds.
M&G explained: "In recent months, unusually high and sustained outflows from the M&G Property Portfolio have coincided with a period where continued Brexit-related political uncertainty and ongoing structural shifts in the UK retail sector have made it difficult for us to sell commercial property.
"Given these circumstances, we have now reached a point where M&G believes it will best protect the interests of the funds' customers by applying a temporary suspension in dealing."
The fund will be "actively managed" during the suspension, but due to customers being unable to access their investments, M&G said it is waiving the 30% annual charge. The waiver will last until the fund resumes dealing, the company added.
The suspension, M&G said, will allow the fund's managers time to raise cash to allow it pay redemptions.
M&G added: "In all other aspects, the fund will continue to operate as normal throughout the suspension and customers will continue to receive income payments."
Shares in M&G were 1.7% lower at 227.20 pence each in London on Wednesday afternoon.
By Eric Cunha; [email protected]
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