In Numbers: All You Need To Know About M&G’s £2.5B Suspended Fund
M&G this week suspended redemptions from its £2.5B fund for small-time investors. The M&G Property Portfolio needs to sell assets because it doesn’t have enough cash to pay back investors that want to take their money out.
The threat of a hard Brexit has receded, but funds seeing big outflows of cash and putting a block on redemptions is reminiscent of the situation in UK real estate in the immediate aftermath of the vote to leave the European Union in 2016.
Here are the numbers that tell you all you need to know about an investor under duress.
£750M The amount of cash withdrawn from the fund between January and August, according to Morningstar.
5% The cash or cash equivalents in its assets under management. That is low enough that the fund will now have to sell assets to pay back investors. So it doesn’t have to become a forced seller, it has put a bar on redemptions.
3.6% The drop in value of the fund in the space of just two weeks in November, according to valuer Knight Frank. That is because …
37% of the fund’s assets are in retail, a sector where values are dropping like a stone. The retail part of the portfolio dropped by 7.7% in November. M&G cited Brexit and retail as the two main reasons investors are pulling their money out.
3 The number of retail assets it owns that are theoretically valued between £100M and £150M — Parc Trostre Retail Park in Llanelli, the Wales Designer Outlet in Bridgend and Fremlin Walk in Maidstone.
-8.2% The return produced by the fund from the beginning of the year until the end of November. That compares to an index of all UK property that has returned -1%.
30% The discount on fees M&G will give to investors while their money is locked in the fund.
£178M The value of the fund’s largest single asset, the Bedfont Lakes office park near Heathrow Airport.