M&G Property funds suspension

The fund manager (M&G) suspended a number of M&G Property funds on 19 October 2023, and intends to close them at an unspecified date in the future.

We’ve put together some questions and answers for investors in these funds.

Which funds have been suspended?

If you’re affected by this you should have received a letter from us, which names the suspended fund that you’re invested in.

Do I have to do anything because of this suspension?

No, we want to keep you informed so you know how you’re affected, but you don’t have to do anything because of this suspension.

What about the previous letter you sent?

We wrote to some investors earlier in October 2023 to explain our plans for the M&G Property funds.

M&G’s decision to suspend the fund means that letter is now out-of-date and can be safely ignored.

We’ve included all the up-to-date, relevant information you need in the most recent letter we sent, so you should read it carefully.

We’re sorry for any confusion and inconvenience this may have caused.

Why have M&G suspended the fund?

M&G decided to close the Fund because they believe that property funds “have been less popular with investors over the last few years”, and that the Fund will get smaller as investors gradually take their money out of it.

Once this decision was made, they also decided to suspend the Fund. This was to stop investors trying to withdraw money from the Fund faster than the Fund’s properties can be sold, as explained in their letter to investors:

“It is common for a fund closure announcement to trigger significant outflows. However the assets owned by the Fund, such as office buildings and warehouses, cannot be sold quickly to accommodate sudden large withdrawal requests. If we didn’t suspend the funds now, it’s likely that only a limited number of investors would be able to sell their holdings before dealing in the Funds had to be suspended to allow the fund manager to sell more properties in order to meet further withdrawal requests. The immediate suspension will therefore protect investors in the Funds by allowing the proceeds to be paid out fairly and equitably.”

What happens to my money that’s in the suspended fund?

M&G will sell all the properties owned by the Fund, and then close the Fund. They hope this will be completed within the next 18 months, although it could take longer.

So investors don’t have to wait until the whole process is completed, M&G will release investors’ money back to us in batches. We’ll then reinvest your portion of the money into a replacement fund.

We’ll write each time this happens to let you know how much we’re reinvesting.

You don’t have to keep your money in the replacement fund. After we pay it in, you can move it into any other available fund/s. Go to our funds page  to search for funds and to find out what to do.

What happens to the regular payments I’m making into the suspended fund?

If you’re currently paying some, or all, of your regular premiums or contributions into a suspended fund, your money will be redirected into the replacement fund instead.

If you’d prefer your money went into a different fund, you can choose to redirect it into any other available fund/s. Go to our funds page to search for funds and to find out what to do.

What is the replacement fund?

If you’re affected by this you should have received a letter from us, which names the replacement fund that we’ve chosen for you. As the replacement fund is also a property fund, it faces a similar risk that a lot of large withdrawal requests at once could trigger its suspension. So you should review this fund to make sure you’re happy to keep your money in it.

We also included a comparison of investment objectives, charges and risk ratings for both funds with our letter.

How will this affect me and my policy?

To minimise disruption to our customers, the following things won’t be affected:

  • Regular withdrawals that are already in place
  • Regular contributions that are already in place
  • Regular fund switching activity that’s already in place (lifestyling for example)
  • Pre-planned payments to you at a preselected date (policy maturity for example)
  • Claims on death or illness
  • Regular policy reviews

The suspension affects your ability to make:

  • One-off withdrawal requests (including pension transfers)
  • Changes to regular contributions
  • Changes to regular withdrawals
  • Fund switch and redirection requests

This should only be disruptive to you if you planned to make changes to your policy while the fund is suspended.

If you’re interested in one of the transactions affected by the fund suspension, please call us on 0800 073 1777 and we can discuss options with you.

Where can I go to get help?

We recommend you get independent professional advice from a Financial Adviser if you’re unsure what to do. A Financial Adviser can make a personal recommendation based on your individual circumstances and the options available to you. If you don’t have an adviser MoneyHelper.org.uk can provide you with impartial guidance, useful tools and calculators or help you find a financial adviser.