M&G Investments is closing its £567m M&G Property Portfolio fund, citing “declining interest in open-ended daily dealing property strategies from UK retail investors”.
Dealings in the fund and its feeder fund have been suspended, with the closure subject to regulatory approval. The company said the decision was “in the best interests of all investors”.
“As the fund has continued to decrease in size, it has reduced the manager’s long-term ability to maintain a diversified portfolio without incurring high, on-going transaction costs required to configure the portfolio – particularly against a backdrop of continued and potentially accelerating outflows,” M&G said.
Once the closure is approved, the fund will start a sale of its assets. M&G expects that process to take a year and a half.
The largest individual assets in the fund, as of its most recent annual report, include Parc Trostre Retail Park in Wales, valued as of September 2022 at £73m, and several units at the Junction 6 Industrial Estate on Birmingham’s Electric Avenue, valued at a combined £76m.
Neal Brooks, M&G’s global head of product and distribution, said: “When we launched this strategy in 2005, we – alongside our peers – provided access to an asset class which had historically been unavailable to long-term savers in a pooled structure. The market has since evolved.
“Declining retail investor interest across the sector for this fund structure, alongside uncertainty around their future composition is posing challenges to the future viability of funds like the M&G Property Portfolio – particularly for those investors who require daily liquidity. We considered various options, but believe this is the right decision for our investors.”
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