M&G plans Luxembourg expansion to secure passporting

Europe-European-Flags-EU-700.jpgM&G is planing to create a new Luxembourg investment hub in response to Brexit with the launch of two Sicav funds .

The asset manager, which manages £225bn assets, will launch the two sub funds by year end as new investment strategies rather than a replication of existing funds.

The firm said it will not relocate any staff from the UK in Luxembourg as part of the move but may add additional staff for the new business later in time.

Grant Speirs M&G’s group finance director says: “A Luxembourg retail SICAV platform will enable us to offer fund strategies to European retail investors if the UK loses financial services passporting rights in several years’ time as a result of its exit from the EU.”

In June, the asset manager said it started work on building Irish funds, to be domiciled in Dublin, amid concerns that Brexit could dent its UK funds business.

Also in June, rival asset manager Columbia Threadneedle said it was planning to relocate fund managers and launch new funds to expand its Luxembourg business following the UK’s decision to Brexit.