UK's Biggest Commercial Property Fund Suspended

UK's Biggest Commercial Property Fund Suspended

M&G PLC (LON: MNG) is a UK-based company which provides savings and investments. The company manages portfolios for both individuals and large institutional investors, such as pension funds, across the world. Prudential Plc and M&G Investments created a new leader in savings and investments in 2017. The company’s £875 million investment in 40 Leadenhall in the City of London is an example of scale and capability to open attractive investment opportunities. It is serving in 28 markets around the world which mainly includes USA, Canada, Israel, Hong Kong, France and UK etc. it also has offices in 20 countries across Europe, Asia and America, ensuring to support customers locally. The company has an aim to grow customers’ wealth by investing in a good portfolio.

M&G suspends £2.5 billion property fund

Due to doubts over Brexit and retail recession, M&G Plc has stopped trading in its £2.5 billion property fund which prompted the investors to withdraw money from the fund which implicitly confirms the disaster in the retail sector following the European Union referendum. On behalf of UK retail investors, the company’s portfolio is a broadly diversified fund which invests in 91 UK commercial properties. Because of structural shifts, it is getting increasingly tough for the company to sell its commercial properties.

Investors have taken out a net of £2.1 billion from real estate funds in the last ten months in FY2019. The company said that Funds would be actively managed even after temporary suspension. Still, the company announced that in case of temporary suspension, M&G is waiving 30% of its annual charge, which will end when the Funds restart dealing. The suspension will be on track for review and investors will be informed of any changes to the level of fee waivers. It is further said suspension will be formally reviewed every 28 days and will only continue if it is in the best interests of customers.

The suspension decision was made by M&G Securities Limited on 4 December 2019. M&G will keep customers fully updated via the M&G website for its restart.

As per the company information, this suspension will allow the fund managers time to raise cash levels to payoff redemptions, even when validating that asset sales are reached at market values and investors in the Fund are protected. In all other parts, the Fund will continue to function as usual throughout the suspension and customers will continue to receive income payments.

News Highlights

On 3rd December 2019, the company announced that Non-Executive Director Robin Lawther purchased 5,000 ordinary shares of 5 pence each on 29 November 2019.

On 2nd December 2019, the company announced appointment of Matthew O’Sullivan as Head of Asia Pacific Origination to create a credit and alternatives origination team in Singapore. The company further announced to appoint Dave Perrett for handling the £161 million M&G Asian Fund and the £90 million M&G (Lux) Asian Fund, with immediate effect.

On 21st November 2019, the company announced that from 1st April 2020. Clare Bousfield, Chief Financial Officer and Executive Director of M&G plc, has been appointed as a Non-executive Director of RSA Insurance Group Plc.

On 29th October 2019, the company announced that Non-Executive Director Clive Adamson purchased 4,600 ordinary shares of 5 pence each.

On 24th October 2019, the company announced that CEO John Foley purchased 100,000 ordinary shares of 5 pence each whereas chairman Mike Evans purchased 32,000 ordinary shares of 5 pence each. The company further announced that CIO Jonathan Daniels purchased 100,000 ordinary shares of 5 pence each and CFO Clare Bousfield purchased 14,000 ordinary shares of 5 pence each.

On 22nd October 2019, the company announced to sell its 57.0 million shares for the benefit of the holders of Prudential ADRs, in connection with the demerger of M&G Plc from Prudential Plc.

On 21st October 2019, the company demerged from Prudential Plc. The company declared that its issued share capital consisted of 2,599,906,866 shares with a value of £0.05 each. The outstanding shares carry voting rights of one vote per share.

Share Price performance

On 9th December 2019, at 08:20 A.M GMT, while writing, MNG share price was reported to be trading at GBX 218.30 per share, a decrease of 1.93 per cent or GBX 4.30 per share on the LSE, as compared to the previous day’s closing price, which was reported to be at GBX 222.60 per share. On 27th November 2019, the shares of MNG have touched a new peak of GBX 240.20 and they reached the lowest price level of GBX 201.20 on 22nd October 2019 in the last 52 weeks. The company’s shares were trading at 9.11 per cent lower from the 52-week high price mark and 8.49 per cent higher than the 52-week low price mark at the current trading level. The company’s market capitalisation (M-Cap) was reportedly valued to be at GBP 5.79 billion concerning the share’s current market price.

The free float of the MNG has been reported to be at 2.59 billion, and the average volume has been 15.54 million at the time of writing.

Outlook

As per the company information, Sky Leasing LLC, which is an airline company, arranged its first leasing fund with a $300 million equity investment. This was from M&G Investments. As per the agreement, the airline company made a proposal to MNG to acquire its stake. This is with the intention of supporting the growth of its asset management platform. This will augment the launch of its Irish operations as well as its operations in San Francisco, California. The company further explained that aircraft leasing is a valid path for airlines to modernize fleets with efficient aircrafts. The company’s fund will provide almost $1 billion to invest in new aircrafts.

There is a partnership of FinecoBank and M&G Plc to offer its UK clients a choice of 80 funds at a nominal management fee. With this partnership, the company will increase its presence in the UK market in the coming years.

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