M&G reopens UK property fund frozen since 2019

LONDON (Reuters) – M&G will reopen its two billion pound ($2.80 billion) UK property fund, which it suspended in Dec 2019, after selling 38 properties in the portfolio, the British asset manager said on Tuesday.

M&G froze the fund due to problems in the UK retail property sector and uncertainty over Brexit, it said at the time.

While many other similar funds froze in March 2020 as a result of the coronavirus pandemic, most have now reopened, industry sources say.

The M&G Property Portfolio and its feeder fund will reopen on May 10 and the firm is waiving 30% of the fund’s annual charge during the suspension because of the inconvenience to investors, it said in a statement.

M&G said the fund has sold real estate assets totalling 700 million pounds since the suspension, with a further 250 million pounds exchanged or under offer.

The assets were sold at a combined -0.1% discount to their net asset value and cash in the fund now stands at 33.2%, M&G said.

Funds investing in illiquid assets like property which offer the ability to take money out daily sometimes have to suspend trading to allow time to sell assets to meet redemption requests.

The Financial Conduct Authority has proposed that property funds require a notice period of three to six months from the request for a redemption to the return of cash.

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