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Property investors locked out of M&G fund for another month

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The M&G Property Portfolio will continue with its trading suspension – 10 months after being implemented.

The fund was suspended in December 2019 due to high levels of withdrawal requests by investors at a time of Brexit uncertainty and structural shifts in the UK retail sector.

And as the coronavirus pandemic evolved causing fresh market uncertainty, M&G has continued its suspension of the property fund on a month-by-month basis.

It confirmed around £234.5m of assets are under offer for sale, with 59% in the retail sector, but added there’s no guarantee transactions will complete.

“The time taken to dispose of an individual asset typically remains elongated owing to current market conditions, including the practical challenges associated with buyers undertaking due diligence”, a statement read.

Since its last update in September, five assets have been sold for £38.4m and since the fund suspension, £197.6m of assets have been sold. The fund’s current size is £2.1bn with a cash balance of 10%, up from 8.2% last month.

M&G has continued to state that re-opening the fund for dealing will depend on cash levels as well as the ‘Material Uncertainty Clause’ (MUC) being adequately lifted.

This MUC was lifted from all sectors last month, with M&G confirming that none of the fund’s direct property assets are subject to statements of material uncertainty.

The fund continues to be actively managed and it continues to waive 30% of the annual charge “in recognition of the inconvenience caused to clients and customers”.

The next update on the fund is scheduled for 3 November.

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