Investments has suspended trading in the shares in its 拢2.54bn (鈧�3bn) property portfolio, citing Brexit-related political uncertainty and a challenging UK retail sector.
The M&G Property Portfolio is a broadly diversified fund which invests in 91 UK commercial properties across retail, industrial and office sectors on behalf of UK retail investors.
M&G said in recent months, 鈥渦nusually high and sustained outflows鈥� from the fund have coincided with a period where 鈥漜ontinued political uncertainty and ongoing structural shifts in the UK retail sector have made it difficult for us to sell commercial property鈥�.
鈥淕iven these circumstances, we have now reached a point where M&G believes it will best protect the interests of the funds鈥� customers by applying a temporary suspension in dealing,鈥� the manager said.
In September this year, the UK鈥檚 financial regulator, Financial Conduct Authority (FCA), published new rules designed to prevent a repeat of the shutdown of open-ended real estate funds in 2016.
The FCA confirmed a number of measures, including requirements that open-ended funds that invest in illiquid assets must suspend dealing when 鈥渢here is material uncertainty regarding the value鈥� of more than 20% of assets.
M&G said the decision to suspend was made by M&G Securities, the funds鈥� authorised corporate director, in agreement with the fund鈥檚 depositary and the FCA has been informed.
M&G said the suspension 鈥� which will be regularly reviewed 鈥� will allow the fund managers time to 鈥漴aise cash levels to pay redemptions, whilst ensuring that asset sales are achieved at market prices and investors in the fund are safeguarded鈥�.
