Contagion risk on cards for property funds following M&G suspension, experts warn

Gatings could become more common, experts warn

Industry experts fear the suspension of the M&G Property Portfolio could lead to a swathe of gatings in the space, despite reassurances from asset managers that their funds have enough of a cash buffer to meet investor redemptions.

M&G shuttered its property fund on Wednesday, blaming "Brexit-related political uncertainty and ongoing structural shifts in the UK retail sector" for a wave of "unusually high and sustained outflows". The fund's assets under management plunged by 27.9% in the year to 31 October from £3.5bn to £2.5bn, according to FE Fundinfo. Morningstar, meanwhile, estimates the fund had seen net outflows of £950m in the 11 months to 30 November, compared to £944m of outflows in the previous 25 months. M&G Prudential UK Property fund suspends trading The dwindling size of the fund led cash le...