M&G has confirmed it is looking to create an investment arm in Luxembourg as it hopes to hold on to its pool of investors in mainland Europe.
The asset manager is now seeking permission from the Luxembourg authorities to launch a fresh product range in the country, making it the first fund group to publicly announce plans in direct response to the Brexit vote.
If approved, M&G hopes to offer two "sub-funds" by the end of the year, which will be new investment strategies, rather than replications of existing funds.
This comes as concerns about the Brexit vote plague financial businesses, with research from consultancy Oliver Wyman revealing the UK’s financial services could suffer a £40bn hit if Britain embarks on a ‘hard’ exit from the European Union.
This will enable us to offer fund strategies to European retail investors if the UK loses financial services passporting rights Grant SpeirsA report from the Investment Association published last month raised questions over whether British fund managers can continue to run the £1.2trn assets on behalf of European investors when the UK breaks away from the EU.
Grant Speirs, M&G’s group finance director, described this move as “prudent” in light of the outcome of June’s referendum.
He said a Luxembourg retail platform will enable M&G to offer fund strategies to European investors if the UK loses financial services passporting rights in several years’ time.
