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Brexit: M&G to shift non-UK Oeic money to Luxembourg

Brexit_arrowsM&G Investments is preparing to transfer billions of pounds worth of customers’ money from UK-domiciled funds to Luxembourg in a Brexit-related move.

The firm wants to merge non-sterling share classes for 21 UK open ended investment companies (Oeics), to equivalent Sicav funds in Luxembourg, similar to a move by Columbia Threadneedle Investments announced recently.

Anne Richards, chief executive of M&G, said the measure would protect the interests of M&G’s customers outside the UK as Brexit negotiations take place.

“Our priority is to minimise disruption for our investors by providing as much certainty as we can,” said Richards.

She added: “The proposals we have announced today [May 16] aim to protect the interests of our non-UK customers by offering continued access to the current range of M&G’s investment strategies, regardless of the final outcome of the negotiations.” 

In total £32.4 billion (€36.8 billion) of assets would be transferred if M&G gains fund shareholder approval and sign-off from the Financial Conduct Authority.

Luxembourg’s financial regulator, the CSSF, has been informed.

Funds included are the M&G Optimal Income fund, which has £19.9 billion of assets, and the European Corporate Bond Fund, with £1.4 billion of assets.

Holders of euro, Swiss franc, US dollar and Singapore dollar share classes are affected.

The funds will have the same investment strategies and which are run by the same fund managers as their Oeic equivalents.

Formal notification of the proposals, including details on timings, will be sent to shareholders from September this year.

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