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M&G to transfer €39bn of non-sterling client assets to Luxembourg

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M&G Investments is planning to transfer €39bn of client assets in UK-domiciled funds to Luxembourg ahead of the UK’s exit from the EU.

The plan was aimed at protecting the interests of M&G’s customers outside the UK as the country negotiated its exit from the bloc, the asset manager said today in a statement.

Anne Richards, chief executive of M&G, said: “Our priority is to minimise disruption for our investors by providing as much certainty as we can.

“The proposals we have announced today aim to protect the interests of our non-UK customers by offering continued access to the current range of M&G Investments strategies, regardless of the final outcome of the negotiations between the UK and the European Union.”

The assets in question are the non-sterling share classes of 21 of the asset manager’s UK-domiciled open-ended funds (see below).

The bulk of the assets relates to European investments in M&G flagship Optimal Income fund, which is one of the biggest investment vehicles in Europe. M&G said €22.6bn would move to Luxembourg.

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Headquarters of Luxembourg’s financial regulator, CSSF

M&G has proposed to transfer assets in euro, Swiss franc, US dollar and Singapore dollar share classes to equivalent funds in its Luxembourg range.

The transfers would take the form of share class mergers, according to M&G.

The Financial Conduct Authority and its counterpart in Luxembourg, Commission de Surveillance du Secteur Financier, have been informed of the asset manager’s proposals.

Formal notifications, including details on timings, will be sent to shareholders from September this year.

A year ago M&G announced it was planning to transfer four funds for non-UK investors – worth €7bn – to Luxembourg because of Brexit.

The fresh transfer plan is the latest in a series of Brexit-related announcements from UK-based asset managers. Columbia Threadneedle Investments last week said it planned to transfer assets from UK-domiciled funds to its Luxembourg range, accounting for roughly 2% of its global assets. 

Funds affected by M&G transfers

Source: M&G Investments
Non-sterling share classes transferring from these UK-domiciled OEICs…… to these Luxembourg-domiciled SICAVs Assets under management
Total AUM in non-sterling share classes transferring to M&G’s Luxembourg range: €39bn
M&G Asian FundM&G (Lux) Asian Fund€239m
M&G Emerging Markets Bond FundM&G (Lux) Emerging Markets Bond Fund€676m
M&G Episode Macro FundM&G (Lux) Episode Macro Fund€283m
M&G European Corporate Bond FundM&G (Lux) European Corporate Bond Fund€1.65bn
M&G Global High Yield Bond FundM&G (Lux) Global High Yield Bond Fund€63m
M&G European Strategic Value FundM&G (Lux) Euro Strategic Value Fund€2.7bn
M&G Global Floating Rate High Yield FundM&G (Lux) Global Floating Rate High Yield Fund€3.5bn
M&G Global Convertibles FundM&G (Lux) Global Convertibles Fund€1.3bn
M&G Global Corporate Bond FundM&G (Lux) Global Corporate Bond Fund€13m
M&G Global Dividend FundM&G (Lux) Global Dividend Fund€2.8bn
M&G Global Emerging Markets FundM&G (Lux) Global Emerging Markets Fund€1bn
M&G Global Macro Bond FundM&G (Lux) Global Macro Bond Fund€791m
M&G Global Select FundM&G (Lux) Global Select Fund€110m
M&G Japan FundM&G (Lux) Japan Fund€168m
M&G Japan Smaller Companies FundM&G (Lux) Japan Smaller Companies Fund€170m
M&G North American Dividend FundM&G (Lux) North American Dividend Fund€164m
M&G North American Value FundM&G (Lux) North American Value Fund€319m
M&G Optimal Income FundM&G (Lux) Optimal Income Fund€22.6bn
M&G Pan European Dividend FundM&G (Lux) Pan European Dividend Fund€108m
M&G Pan European Select FundM&G (Lux) Pan European Select Fund€54m
M&G Short Dated Corporate Bond FundM&G (Lux) Short Dated Corporate Bond Fund€110m

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