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M&G delays transfer of UK-based funds to Luxembourg

M&G delays transfer of UK-based funds to Luxembourg

M&G Investments has postponed the previously announced transfer of four UK-domiciled open-ended funds to its Luxembourg platform in the aftermath of the Brexit result to sometime in 2018.

The asset manager announced almost three months ago a proposal to move the funds by the end of 2017, which it said was to protect the interests of non UK-domiciled clients in the wake of the country’s vote to leave the European Union in June 2016, according to M&G's initial statement.

Transferring the vehicles, which add up to more than 8.1 billion euros in assets ($9.8 billion), required shareholder approval. The UK asset manager decided to postpone the move 'to minimize disruption to our investors by ensuring there is sufficient time to prepare for these transfers,' according to the firm's latest statement dated September 4.

M&G, which as of June 30 had roughly $371.4 billion in assets under management, signed a distribution agreement with Peru-based firm Credicorp Capital earlier this year to bring its funds to institutional clients in Latin America.

Both firms said in emailed statements that the delay wouldn’t impact their distribution plans in the region.

The four funds set to transfer and their assets under management, according to M&G's most recent statement, are:

  • Dynamic Allocation Fund: 5.6 billion euros ($6.7 billion)
  • Income Allocation Fund: 983.6 billion euros ($1.2 billion)
  • Prudent Allocation Fund: 1.5 billion euros ($1.8 billion)
  • European Inflation Linked Corporate Bond Fund: 78.6 million euros ($94.6 million)

Luxembourg’s financial regulation authority, the Commission de Surveillance du Secteur Financier, and its UK counterpart, the Financial Conduct Authority, had approved the proposal to move the funds. They have been informed of the decision to postpone, according to M&G.

 

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