Ghosts of Link Equity Hover Over England

M&G – the British insurer and asset manager – plans to continue the suspension of its 2.5 billion-pound property funds. The company made the announcement after it sold 70.4 million pounds in property to raise cash.

It has been a month since the firm announced plans to freeze its M&G Property Portfolio and its feeder funds due to ongoing economic concerns across the United Kingdom.

M&G Suspension Continues

Investors have increased redemption requests in the face of the upcoming Brexit and new fears about a recession. The firm, however, said it will open the funds again when “cash levels have sufficiently restored.”

The new update is part of a regulatory update, according to Reuters. The firm suspended its funds on Dec. 4, 2019. It must update investors every 28 days on the funds’ status. M&G  also said it holds 67.2 million pounds in real estate that has “offers” or is currently locked up in a legal process.

The suspension reminds a lot of investors of the collapse of Neil Woodford’s equity fund. Regulators are seeking ways to address the challenge of investor redemptions at open funds that trade illiquid assets. This week, investors in the Link Equity Income fund received more bad news. The fund pumped 15 million pounds to Rutherford Health, an illiquid firm, that had a deal in place before the suspension.

Woodford had promised up to 80 million pounds of funding when he first took a stake in the company.