M&G reopens UK property fund frozen since 2019 (updated)

ICG Longbow Senior Secured UK Property Debt Investments

20/04/2021 17:20

(Adds Aegon, industry comment)
    By Carolyn Cohn
    LONDON, April 20 (Reuters) - M&G  MNG.L  will reopen its 2
billion pound ($2.8 billion) UK property fund, which it
suspended in December 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 similar funds froze in March 2020 as a result of
the coronavirus pandemic, most have now reopened, industry
sources say.
    "Today’s announcement brings the property industry closer to
'normal trading'," said Oli Creasey, property research analyst
at Quilter Cheviot.
    Aegon Asset Management said on Tuesday it expected to reopen
its 400 million pound property income fund in the second
quarter.
    "We continue to make good progress with asset sales in order
to raise liquidity," an Aegon spokesperson said by email. 
    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 had 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.
    Britain's 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.
    ($1 = 0.7152 pounds)

 (Reporting by Carolyn Cohn, Editing by Louise Heavens and Mark
Potter)
 ((carolyn.cohn@thomsonreuters.com; 44 207 513 4391;))