M&G to reopen £4.1bn property fund

M&G to reopen £4.1bn property fund

The return of market confidence and enhanced liquidity have been cited as M&G became the latest fund group to announce a reopening of its property portfolio.

The £4.1bn M&G Property Portfolio offering was among those to suspend trading in the wake of June's Brexit vote, as uncertainty engulfed the asset class.

However the asset manager said it had since sold, exchanged or placed under offer some 58 properties for £718m, building liquidity levels, as "confidence returns to the market", and will be reopening the fund on November 4.

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The fund, which enacted its suspension on July 5 after investor redemptions "rose markedly due to high levels of uncertainty in the UK commercial property market", has also removed a negative fair value adjustment to prices.

William Nott, chief executive of M&G Securities, said: "Suspension created an environment more akin to normal conditions, allowing us time to choose the most appropriate assets to sell at the right price in order to preserve the integrity and future of the fund.

"As such, the fund manager has kept higher quality assets while reducing the exposure to assets deemed riskier than their prime counterparts, putting the portfolio in a good position for any further volatility that may be experienced in the lead up to Brexit.”

The move forms part of a broader normalisation of conditions, with the likes of Henderson, Aberdeen, Standard Life Investments and Columbia Threadneedle having decided to resume trading in their property vehicles.

Other measures enacted in the referendum fallout, including fair value adjustments to prices, have been rescinded. Meanwhile, this week Kames moved pricing on its £384m Property Income fund back to the default 'offer' level.

Aviva Investors is now the only fund house yet to reopen its property portfolio.