M&G is to seek shareholder approval to move four non-UK client funds to Luxembourg in what it is calling a 'precautionary move'.
The shift in domicile comes just days after the anniversary of the EU referendum and will see the four funds, with a cumulative market value of £6 billion, shift to the European country in November.
'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, we believe it is prudent to take action now to protect the interests of our international customers,’ said Anne Richards [pictured], chief executive of M&G.
'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.'
The four funds – M&G Dynamic Allocation Fund, M&G Income Allocation Fund, M&G Prudent Allocation Fund and the M&G European Inflation Linked Corporate Bond Fund – are marketed specifically to non-UK investors.
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 Dynamic Allocation Fund: £4.2 billions
- M&G Income Allocation Fund: £823 million
- M&G Prudent Allocation Fund:£982 million
- M&G European Inflation Linked Corporate Bond Fund:£68.3 million
*Source: M&G Investments, as of 31 May 2017