M&G has announced its intention to close the M&G Property Portfolio due to “declining interest in open-ended daily dealing property strategies” from UK retail investors.
The fund has been suspended while M&G informs clients on the next steps before closing.
The M&G Property Portfolio, in line with the wider UK property sector, has seen a steady decline in assets in recent years, from £2bn in 2021 to around £550m today.
The fund was previously suspended in 2019 before reopening in 2021.
An M&G spokesperson told Portfolio Adviser that the decision was made following consultations with clients. It will take up to 18 months to shutter the fund, which currently has 25 properties currently in the portfolio.
As part of the process, the firm will make an immediate 30% reduction to the fund’s management fees and will waive all cash management charges.
Neal Brooks, M&G’s global head of product & distribution, said: “When we launched this strategy in 2005, we – alongside our peers – provided access to an asset class which had historically been unavailable to long term savers in a pooled structure.
“The market has since evolved. Declining retail investor interest across the sector for this fund structure, alongside uncertainty around their future composition is posing challenges to the future viability of funds like the M&G Property Portfolio – particularly for those investors who require daily liquidity.
“We considered various options, but believe this is the right decision for our investors.”
Earlier in October, Canada Life Asset Management announced it was in the process of winding up its own UK property fund after deeming it as no longer ‘commercially viable’.