Fund manager M&G has blamed city rules for refusing to return money from its suspended £ 2.1bn real estate fund to investors, of which nearly a fifth is now held in cash and does not return no return.
The M&G Property Portfolio fund has blocked investor withdrawals since December 2019, when a series of real estate funds were blocked as falling commercial property valuations sparked a wave of redemption requests.
M&G has collected £ 15.4million in fees for running the fund in the 12 months ending in September, according to a delayed annual report released last month.
He has waived 30% of his fees since the suspension, unlike some of his rivals. The real estate funds of Janus Henderson, Aegon and Aviva Investors also remain closed, although others have reopened.
David Morley, a city professional who has invested in the M&G fund, said managers should cut their fees instead of “charging fees for just cash.”
A spokesperson declined to say whether M&G would reduce its fees further, but said the fund “continues to be actively managed and pay distributions of income.”
Fund managers sell assets like street units and malls so they can return investments to clients.
The fund had £ 395million in cash, 18.1% of its total assets, as of December 22 – up from 10.1% in September as sales rebounded following a market freeze induced by a pandemic . An additional £ 157million of properties had agreed sales or were in the process of being offered.
Mr Morley said investors demanding their repayment should be paid immediately out of available cash, proportionate to their holdings, as it could be “years” before the fund raises enough funds to meet expected redemptions. and the desired additional cash buffer of 20%.