LONDON, Jan 2 (Reuters) - British insurer and asset manager
M&G will continue the suspension of its 2.5 billion
pound ($3.30 billion) property funds, it said on Thursday, after
selling 70.4 million pounds of real estate assets to raise cash.
M&G said on Dec. 4 that it was freezing the M&G Property
Portfolio and its feeder fund after Brexit uncertainty and
weakness in the retail sector led to a surge in investor
requests to cash out.
The suspension follows the collapse of money manager Neil
Woodford's equity fund and comes as regulators seek changes to
funds that invest in hard-to-sell assets such as property but
enable investors to cash out at short notice.
M&G's funds will reopen "once cash levels have been
sufficiently restored", the company said in a statement without
specifying a date. It is required to update investors on the
status of the fund every 28 days at least.
The asset manager, which split from parent Prudential
in October, said it had completed the sale of a retail
park in Edmonton, northeast London, for 51.4 million pounds and
exchanged contracts on a property in Staines, southeast England,
for 19 million pounds.
M&G said it had a further 67.2 million pounds in properties
under offer or going through legal processes.
Seven property funds with a combined 18 billion pounds under
management froze in quick succession after the Brexit referendum
in June 2016.
Other property funds have said they are monitoring the
market situation.
M&G's funds had 4.8% of their assets in cash - a smaller
cash buffer than other major property funds such as those run by
Legal and General and Aberdeen Standard Investments
.
($1 = 0.7567 pounds)
(Reporting by Carolyn Cohn
Editing by David Goodman)