London - M&G Investments (M&G) has decided to continue the temporary suspension of trading in the M&G Property Portfolio and its feeder fund until further notice. The decision has been taken with the agreement of the Fund's Depositary and the Financial Conduct Authority has been informed.
The suspension is enabling the orderly sale of assets at reasonable values, balancing the need to protect the interests of all the Fund’s shareholders with reopening the fund as soon as practically possible.
As at 23 August the Fund’s cash position had risen to 6.7%, with assets under management of £3.96bn. Assets have been exchanged and sold from all sectors across a range of asset sizes.
M&G believes a more normal commercial property market combined with a fund cash holding target of 12.5% - plus additional cash for working capital and likely client redemptions - will provide a suitable environment to lift the suspension.
The M&G Property Portfolio is valued twice a month and independent valuer Knight Frank continues to report a degree of uncertainty around property asset values.
In consultation with Knight Frank, M&G continues to apply a fair value adjustment (FVA) to the Fund of £150 million.
The FVA and suspension of the Fund are reviewed regularly by M&G and the Depositary. We will notify Fund shareholders in advance of any lifting of the suspension.