M&G to lift suspension on £4bn property fund

Fiona Rowley 700

M&G Investments will reopen its £4.1bn Property Portfolio and feeder fund on 4 November after four months since its suspension.

This makes the Aviva Investors Property Trust  the only commercial property fund still suspended since the EU referendum.

As part of their move, M&G will also remove the fair value adjustment applied on 1 July of 4.5 per cent.

So far the fund managed to sell, exchange or place under offer 58 properties have been sold for a total of £718m.

In September, fund manager Fiona Rowley updated investors saying she intended to double the fund’s cash cushion in response to investor redemptions. The fund held £295m cash at the time of the referendum.

At the time Rowley said: “We didn’t want to do a fire sale after the vote but now we are seeing more traction in the market as it has got more of the risk off.”

The fund currently invest in 119 UK commercial properties across retail, industrial and office sectors.

M&G Securities chief executive William Nott says: “Suspending the fund wasn’t a decision we took lightly, but we felt it was the only way to protect the interests of investors in what were very unusual circumstances in the aftermath of the referendum.

“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.”