M&G Investments is beginning the transfer process for the assets of four UK-domiciled open-ended funds on its Luxembourg platform as Brexit negotiations continue. All four funds are distributed exclusively to customers outside the UK. The transfer of assets is subject to fund shareholder approval.
With a cumulative market value of £9.3bn, the four funds are: M&G European inflation linked corporate bond fund, M&G dynamic allocation fund, M&G income allocation fund and M&G prudent allocation fund. Their assets will be merging into M&G (Lux) European inflation linked corporate bond fund, M&G (Lux) dynamic allocation, M&G (Lux) income allocation and M&G (Lux) conservative allocation funds.
Formal notification of the proposals have been sent to shareholders on 10 January. Shareholders will then have four weeks to cast their votes. Details of the outcome of the votes will be available following Extraordinary General Meetings on 9 February 2018. In the event of a successful vote, full mergers of the four funds are expected to take place on 16 March 2018.
The Commission de Surveillance du Secteur Financier (CSSF) and the Financial Conduct Authority (FCA) have both given their approval to M&G’s proposals.
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.”