Saudi billionaire takes £182mn stake in M&G

Saudi billionaire takes £182mn stake in M&G

A billionaire member of the Saudi royal family has acquired a £182mn stake in listed financial services group M&G. 

Prince Alwaleed, a prince who is a direct descendant of the founder of Saudi Arabia, has built up a stake in M&G via his company Kingdom Holdings, according to the Financial Times. 

M&G has a current market capitalisation of around £5.5bn, meaning the prince’s stake is around 3 per cent of the group’s shares.

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In addition to the fund management business, M&G operates the Prufunds range and owns the former Ascentric platform, which it acquired from Royal London in 2020.

The platform has since been rebranded to M&G Wealth.

Last week (August 16), FTAdviser revealed that M&G Wealth is gearing up to launch an IFA buyout scheme for firms nearing retirement in an effort to attract more advisers to its network model.

In recent months, there has been considerable disruption at M&G, with both the chief executive John Foley, and chief investment officer Jack Daniels, due to retire in the coming year.

Morningstar data examined by FTAdviser found that in its retail funds business, excluding Prufunds, total assets have shrunk from just over £30bn at the start of July 2021, to £26bn in June 2022.

Ben Yearsley, investment consultant at Fairview, said M&G is renowned for its very strong bond offering, but no longer has what he considers to be a stand out equity product.

He argued that the company relied for too long on the M&G Recovery fund, and the M&G Global Basics fund, and that while the firm is known for its bonds, “it lacks a standout equity fund". 

M&G has a long history in the UK adviser market and launched the first ever unit trust in the UK market, M&G Global Basics.

The fund has recycled through a number of different managers, but poor performance persisted and in 2017 the fund’s name was changed to M&G Global Themes.

Morningstar data showed this fund to have £2.2bn of assets as at July 2022. Shortly after the name change completed, it merged with another M&G fund, Global Leaders.

On merging in March 2018, the combined fund had assets of around £2.5bn, indicating the mandate has lost £300m in assets in those four years.

The Morningstar data showed the fund had net outflows in nine of the previous 12 months. 

M&G Recovery was for many years run by Tom Dobell until he stepped down in early 2020. The fund had assets of around £6.7bn in assets in July 2018.

By the time Dobell quit in early 2020, the fund’s assets were less than £1.5bn.

At the end of June 2022, the fund had assets of £1.5bn.

Darius McDermott, managing director at Chelsea Financial Services, said he holds the M&G Global Dividend fund in his portfolios and regards this as potentially the standout equity product.