Gee and Watson

M&G have temporarily announced the suspension of dealings within their fund.  Firstly, do not panic as there is nothing sinister in this decision.  We have seen this action many times before in relation to property funds.

What has happened and why?

Due to continued political uncertainty (Brexit) and ongoing shifts in the UK retail sector M&G are experiencing unusually high outflows from their M&G property fund.  In order to meet withdrawals M&G would need to sell commercial property holdings.  As I am sure you will appreciate it is more difficult to sell commercial properties than residential properties.  As M&G do not wish to sell properties at heavily discounted prices (in order to protect investor’s investment values) they have elected to impose a temporary suspension of dealings within the fund in order to allow them time to raise cash levels and preserve property values for investors by selling assets in a controlled manner.

The funds will still be actively managed whilst in suspension, but in recognition of investor’s temporary inability to access this fund, M&G is waiving 30% of its annual charge during the suspension.  The suspension will be reviewed on a monthly basis.

 Will you be impacted?

  • If you do not need capital from this fund you will not be affected.  If a withdrawal is required this may be taken from other funds within your portfolio.
  • If you receive regular income your income will be unaffected. However your income will not be derived from the suspended M&G fund but taken proportionally across all your other funds held within your plan.
  • If a rebalance of your portfolio is necessary then alternative action may be taken such as fund switches in and out of other funds excluding M&G property.

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