M&G Property Portfolio reopening for dealing on 10 May 2021

21 April 2021 - M&G Investment has announced that it will reopen the M&G Property Portfolio for dealing as of midday on 10 May 2021. The decision to lift the suspension has been taken by the Fund’s Authorised Corporate Director (ACD) and its Depositary, who are now satisfied the fund has a suitable liquidity position for customers who wish to sell their investment and for those who wish to remain invested. The Financial Conduct Authority has also been notified.

In a press release issued this week, M&G said that a total of 38 carefully selected properties have been exchanged or sold by the fund’s manager, Justin Upton, resulting in reduced portfolio risk, strengthening the fund’s income stream and decreasing the vacancy rate to 7.2%. Cash now stands at 33.2%*.

At a sector level, the fund has reduced exposure to Retail from 38.4% to 28.1% and is now overweight to Industrials. Assets in the Office sector are focused on Central Business Districts. More than 90% of both rental income and service charges for 2020 has been collected and the fund has delivered an income distribution of 4.7%.

Laurence Mumford, Chair of the Fund’s ACD, M&G Securities Limited, commented: “We deeply regret the inconvenience that suspension has caused our customers and clients. The decision to suspend was taken to protect the interests of all of our investors, enabling the fund manager to sell assets in an orderly fashion. We believe this has preserved value for customers, while also maintaining the integrity and future prospects of the fund.”

M&G believes the three weeks between this announcement and the resumption of dealing will give clients and customers the time to consider their investment in the fund and for investment platforms to make necessary arrangements for the fund to be available on
their trading systems.

M&G is also making several changes to the fund, including the pricing methodology, which will change to dual pricing on a full spread basis from 25 June. This will provide greater dealing clarity, reduce the potential for large price fluctuations and provide stronger alignment with the fund’s long term horizon. In addition, the recently updated target cash weighting - circa 20% in normal market conditions - will enhance liquidity management. M&G will bear the costs of implementing these changes.

In recognition of the inconvenience caused to customers and clients, M&G has waived 30% of the fund’s annual charge during suspension. This will continue until the fund reopens. M&G will also continue to waive the fee on cash held above 20% until the end of 2021.

*Source: M&G, as at 19 April 2021

Published on 21/04/2021