M&G Investments has initiated its Brexit-driven measure to transfer the assets of four of its UK-domiciled funds to its Luxembourg platform.
Initially announced over six months ago as part of the asset manager’s efforts to protect investors from the UK’s exit from the European Union, the plan was subsequently delayed in September with M&G stating it needed more time to prepare in order to minimize disruption to its investors.
The four funds in question are the M&G European Inflation Linked Corporate Bond, M&G Dynamic Allocation, M&G Income Allocation and M&G Prudent Allocation, with their combined assets under management totaling £9.3 billion ($12.6 billion).
The transfer process has already been approved by the Luxembourg and UK regulators and is now awaiting shareholder approval, who have until February 9 to cast their vote. If the vote is successful, the full transfer of the funds’ assets to their Luxembourg equivalents is expected to take place by March 16.
In advance, the UK firm is launching four Luxembourg versions of the funds ahead of the vote due to new client demand, with the M&G (Lux) Dynamic Allocation, M&G (Lux) Income Allocation and the M&G (Lux) Conservative Allocation set to be available on January 16 . The remaining Luxembourg fund, M&G (Lux) European Inflation Linked Corporate Bond, will be launched once the merger is complete.
Commenting on their decision, Anne Richards, chief executive of M&G, said: ‘Following the referendum decision for the UK to leave the European Union, M&G has taken a series of precautionary measures aimed at protecting the interests of our international investors.
‘These measures, which range from building up our SICAV offering to establishing a legal structure in Luxembourg, will ensure that our clients outside the UK retain access to our investment strategies regardless of the final agreement between the UK and the rest of Europe.’
M&G, which as of September 2017 had roughly $386 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.