UK biggest property investment firm M&G suspends fund withdrawals

Investors in the UK’s biggest commercial property fund – worth £2.5bn – have been temporarily prevented from taking out their money.

Investment firm M&G said withdrawals from its property portfolio fund had been suspended after investors consistently withdrew their savings.

The firm blamed “Brexit-related political uncertainty” and difficulties in the retail sector for the situation.

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The fund has shrunk by £1.1bn so far this year.

“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,” M&G said in a statement.

It has waived 30% of its annual charge to investors, as they were unable to access their money, although some have called for action from the regulator on such charges.

The M&G Property Portfolio has invested in 91 UK commercial properties across shopping centres, other retail, industrial and office sectors on behalf of UK investors.

The same fund was suspended in July 2016 for four months following the UK’s EU referendum when money flooded out of such funds.

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Investors range from armchair, retail investors to institutional investors, dealing with millions of pounds.

M&G has been unable to sell properties fast enough, particularly given its concentration on the retail sector, to meet the demands of investors who wanted to cash out.

The decision to suspend the fund, and its feeder fund, was taken by its official monitor – its authorised corporate director – and the City watchdog has been informed.

“The FCA is working closely with the firms involved to ensure that timely actions are undertaken in the best interests of all the fund’s investors,” a spokesman for the Financial Conduct Authority (FCA) said.

M&G said the suspension would be monitored daily, formally reviewed every 28 days, and would only continue “as long as it is in the best interests of our customers”.

This will allow assets to be sold over time, rather than as a fire sale, in order to meet investors’ withdrawal demands. The firm has written to investors to explain the current situation.

Source: BBC News

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I am a Property/Energy Consultant TA DenEco Consultancy - www.deneco.co.uk: A friendly, energetic and adaptable individual with keen interest and aptitude for learning and motivating others, with great academic skills and work experience in both Life science and Environmental Management, seeking an opportunity to use his proven flair for teamwork and creativity in Property Purchase, Energy Efficiency, Environmental management for sustainable development and growth in any related sector or industry. I help individuals, businesses, SMEs and corporate clients save or make money in regards to Property investment, energy efficiency, environmental management solutions. The foundation of my experience is environmental protection. I have a passion for helping people, businesses and corporate organization achieve their dream through Property Investment and become more efficient and effective in their energy, and environmental management. I get satisfaction from knowing that the work am doing is helping make/save money and the environment.  Contact us @ www.deneco.co.uk Outside of work you can find me spending time with family, studying and researching for new opportunities and continuous development. Specialties: Property Investment, EPC provider, Energy Efficiency, Environmental  management.

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