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Columbia Threadneedle to transfer funds to Luxembourg ahead of Brexit

Columbia Threadneedle Investments plans to transfer assets from UK-domiciled funds to its Luxembourg range ahead of the UK’s exit from the EU.

The asset manager will launch 13 new funds in its Luxembourg SICAV vehicle to accommodate the transferring assets, it said in a statement on Wednesday. In total, 20 UK-based funds will see assets move to Luxembourg.

All transfers are subject to approvals from investors and the UK and Luxembourg regulators. Affected investors will be contacted between now and September.

The group did not put a figure on the amount of money expected to move, but a spokesman said European clients in UK-based pooled funds “account for a very small percentage” of Columbia Threadneedle’s global assets – roughly 2%. The affected funds together are worth roughly €28bn (see below).

According to IPE’s 2017 Top 400 Asset Managers report, the company ran €432bn worldwide at the end of 2016, including €63.5bn for European institutional clients.

Michelle Scrimgeour, CEO for Europe, the Middle East and Africa at Columbia Threadneedle, said: “Our priority is to provide certainty and continuity for our clients. By facilitating the transfer of European customers to our existing Luxembourg range we will ensure they can continue to access our best investment strategies in a UCITS-compliant fund, regardless of the final agreement between the UK and the EU.

“For EU investors, the transfers will remove uncertainty regarding the future status of their investment in their home country.”

In June last year, M&G announced similar plans to move €7bn worth of assets from its UK-based funds to its Luxembourg fund vehicle to safeguard its non-UK investors.

Affected Columbia Threadneedle funds

UK-based fundSizeLuxembourg-based fundSize
Threadneedle American Fund£2.2bnThreadneedle (Lux) – American$230m 
Threadneedle American Extended Alpha Fund£169m Threadneedle (Lux) – American Extended AlphaNew fund 
Threadneedle American Select Fund£1.1bnThreadneedle (Lux) – American Select$9.4m 
Threadneedle American Smaller Companies Fund£641mThreadneedle (Lux) – American Smaller CompaniesNew fund 
Threadneedle Asia Fund£599mThreadneedle (Lux) – AsiaNew fund 
Threadneedle Credit Opportunities Fund£1.9bn Threadneedle (Lux) – Credit OpportunitiesNew fund 
Threadneedle European Corporate Bond Fund£169m Threadneedle (Lux) – European Corporate BondNew fund 
Threadneedle European High Yield Bond Fund€726m Threadneedle (Lux) – European High Yield BondNew fund 
Threadneedle European Select Fund£3bnThreadneedle (Lux) – European Select€32.9m 
Threadneedle European Smaller Companies Fund£2.2bnThreadneedle (Lux) – European Smaller CompaniesNew fund 
Threadneedle Global Emerging Markets Equity Fund£326mThreadneedle (Lux) – Global Emerging Market Equities$4.6m
Threadneedle Global Equity Income Fund£1.6bnThreadneedle (Lux) – Global Equity IncomeNew fund 
Threadneedle Global Extended Alpha Fund£261m Threadneedle (Lux) – Global Extended AlphaNew fund 
Threadneedle Global Select Fund£1.2bn Threadneedle (Lux) – Global SelectNew fund 
Threadneedle Pan European Fund£252mThreadneedle (Lux) – Pan European Equities€64.7m
Threadneedle Pan European Equity Dividend Fund£63m Threadneedle (Lux) – Pan European Equity DividendNew fund 
Threadneedle Pan European Smaller Companies Fund£1.6bnThreadneedle (Lux) – Pan European Smaller CompaniesNew fund 
Threadneedle UK Fund£2.1bnThreadneedle (Lux) – UK Equities£145.3m 
Threadneedle UK Absolute Alpha Fund£648mThreadneedle (Lux) – UK Absolute AlphaNew fund 
Threadneedle UK Equity Income Fund£3.9bnThreadneedle (Lux) – UK Equity Income£78.4m 

Source: Columbia Threadneedle Investments. Fund size data correct as of 31 March 2018. 

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