Brexit: M&G to transfer £6bn of funds to Luxembourg
M&G Investments, the London-headquartered asset manager, is proposing to move the assets of four of its UK-domiciled, open-ended strategies to equivalent SICAV funds on its Luxembourg platform ahead of Brexit.
The plan, which requires fund shareholder approval, aims to protect the interests of M&G’s non-UK-domiciled customers as the UK negotiates its exit from the European Union, M&G said in a statement.
Both Luxembourg and Britain’s financial market regulators have already approved the M&G proposal, which will be sent to fund shareholders in early September, M&G said.
If the shareholders give it the green light, M&G expects to transfer the four funds’ assets to the new Luxembourg funds towards the end of November.
The four funds, which have a combined market value of £6bn (€6.8bn), are distributed exclusively outside the UK, M&G said.
The four funds are the M&G Dynamic Allocation Fund, the M&G Income Allocation Fund, the M&G Prudent Allocation Fund and the M&G European Inflation Linked Corporate Bond Fund.
Following the move, the M&G Prudent Allocation Fund will be renamed M&G (Lux) Conservative Allocation Fund, as a Luxembourg-domiciled SICAV.
The four Luxembourg SICAV funds will follow identical strategies to the current UK-domiciled funds, and will be run by the same fund managers.
M&G chief executive Anne Richards said that with “little clarity yet on the outcome of the negotiations between the UK and the rest of the European Union on its future trading relationship”, M&G thought it “prudent to take action now, to protect the interests of our international customers”.
She added: “The proposals to transfer the assets of these four funds have a primary aim – to minimise disruption for our investors. Approval of the transfer will ensure they retain access to the same strategies and the same fund managers.”
As of 31 March, M&G managed around £275bn (€312.3bn) of assets. The fund house, once known as Municipal & General Securities Company Ltd, was founded in 1931, and is a subsidiary of the Prudential insurance company.