Suspension of the Prudential M&G Property Portfolio

We have announced a suspension on transactions on a number of insured property funds we offer. These funds are linked to the M&G Property Portfolio Fund which was suspended on 4 December 2019. When we refer to ‘Prudential M&G Property Portfolio’, we mean the insured versions of the funds available on our Life and Pensions products. And when we refer to ‘M&G Property Portfolio’ we mean the underlying OEIC fund.

What does this mean?

We cannot accept further investments into the affected funds, and you won’t be able to make some types of withdrawals from the funds.

What date were the funds suspended? 

Our linked Life and Pension funds were suspended from 5 December 2019.

Why have we made this decision?

There have been significant outflows in the M&G Property Portfolio Fund, over the last few months. M&G have therefore taken the decision to protect the long term interests of investors by suspending the M&G Property Portfolio, and we have taken the same action with our insured funds (Prudential M&G Property Portfolio).

The Prudential insured funds directly affected by this suspension are:

Insured Life and Pension Fund
Prudential M&G Property Portfolio (exSA) S1
Prudential M&G Property Portfolio (exSA) S2
Prudential M&G Property Portfolio Acc (exM&G)
Prudential M&G Property Portfolio Acc (Ex M&G)
Prudential M&G Property Portfolio Pre A
PruFRIA M&G Property Portfolio
Prudential Ex-DSF M&G Property Portfolio Property
Prudential M&G Property Portfolio Ser A
Prudential M&G Property Portfolio S1
Prudential M&G Property Portfolio S2
Prudential M&G Property Portfolio S2 (Inc)
Prudential M&G Property Portfolio S3
Prudential M&G Property Portfolio S4
Prudential M&G Property Portfolio S4 (Inc)
Prudential M&G Property Portfolio S5
Prudential M&G Property Portfolio S5 (Inc)
PIA M&G Property Ser B

How the suspension affects investors in the Prudential insured funds

Any existing investment in our Prudential insured Life and Pension funds will remain invested with the following transactions allowed:

  • Taking retirement benefits (regular withdrawals and income payments)
  • Maturity
  • Any claims on death or critical illness
  • Pension sharing on divorce.

These transactions will not be allowed:

  • Further investments into the fund
  • Withdrawals out
  • Any switches out of or into Property
  • Life surrenders
  • External transfers
  • Increases to adviser charges taken from Property funds.

The unit prices for the Prudential M&G Property Portfolio Fund are linked to the value of the property assets of the underlying fund, the M&G Property Portfolio Fund. Due to the ongoing Coronavirus situation, independent valuers in the market have found it increasingly difficult to accurately value properties held by commercial property funds.

The general lack of market activity means there are few similar properties with which to compare valuations. There are also issues with assessing how secure rental income from tenants may be, both now and in the future. These issues can create uncertainty in the overall fund valuation and therefore also affect fund prices.

This underlying fund is still suspended but it remains invested and managed, and publishes a daily unit price. However, given the ongoing situation, if you move money out of the Prudential M&G Property Portfolio Fund at this time, the unit price you receive may be more or less than the current value of the underlying assets. You need to be aware that your transaction will use the current unit price and that the amount of money you receive won’t be adjusted in any way at a later date.

How the suspension of the M&G Property Portfolio Fund affects Retirement Account, Prudential International Investment Portfolio and Prudential Onshore Portfolio Bond clients

The following OEIC funds available on Retirement Account, Prudential International Investment Portfolio (PIIP) and Prudential Onshore Portfolio Bond (POPB) are also impacted and these were suspended at midday yesterday, 4 December:

GB00B7SX7S61 M&G Feeder of Property Portfolio Sterling I Acc
GB00B842HT59 M&G Feeder of Property Portfolio Sterling I Inc
GB00B89X8P64 M&G Property Portfolio Sterling I Inc
GB00B8FQVP09 M&G Property Portfolio Sterling D Inc
GB00B8FSZ434 M&G Property Portfolio Sterling A Acc
GB00B8FWH509 M&G Feeder of Property Portfolio Sterling A Inc
GB00B8FYD926 M&G Property Portfolio Sterling I Acc
GB00B8G9TT83 M&G Property Portfolio Sterling A Inc

How we’re communicating the suspension to existing investors

We’ll be writing to customers invested in these funds to explain why we have taken this action and how this affects your investment with us. We’re aiming to do this as soon as possible, and your adviser will receive a copy of this communication.

In the meantime, we can be contacted on 0800 000 000.

Questions and Answers

Currently we do not believe this issue will impact any of our other funds.

We do have some multi-asset funds which invest in a wide range of assets, with property being just one of those invested in. These are not suspended even where that Property exposure is obtained through the M&G Property Portfolio, but we will continue to monitor the situation.

At this time we cannot accept any new investments into any suspended funds. We will provide updates on this site.

At this time we cannot accept any switches into property. We will provide updates on this site.

You cannot switch or transfer out of the fund while the suspension is in place. You can still send us a completed form and we will keep the form, and contact you once the suspension is lifted to explain your options and to check whether you still want to proceed.

You cannot withdraw from the fund while the suspension is in place. You can still send us a completed form and we will keep that form, but we will contact you once the suspension is lifted to explain your options and to check whether you still want to proceed. We can process withdrawals from any other fund holdings where transactions are not suspended, subject to individual policy rules.

Yes, we will honour and process all requests received before 5 December.

Yes, taking your retirement benefits and maturities will continue to be paid. We will also continue to pay out on death claims. For further details please contact us.

Previously arranged regular withdrawals and income payments will continue to be paid.

We don’t yet know how long the funds will remain suspended for, but we’ll monitor the situation closely. We’ll publish more information on this page when we have more information, or if the situation changes.

Yes, please call us on 0800 000 000 for valuations.

The unit price of the fund will continue to be published on our website.

The unit prices for the Prudential M&G Property Portfolio Fund are linked to the value of the property assets of the underlying fund, the M&G Property Portfolio Fund. Due to the ongoing Coronavirus situation, independent valuers in the market have found it increasingly difficult to accurately value properties held by commercial property funds.

The general lack of market activity means there are few similar properties with which to compare valuations. There are also issues with assessing how secure rental income from tenants may be, both now and in the future. These issues can create uncertainty in the overall fund valuation and therefore also affect fund prices.

This underlying fund is still suspended but it remains invested and managed, and publishes a daily unit price. However, given the ongoing situation, if you move money out of the Prudential M&G Property Portfolio Fund at this time, the unit price you receive may be more or less than the current value of the underlying assets. You need to be aware that your transaction will use the current unit price and that the amount of money you receive won’t be adjusted in any way at a later date.

We will post any updates on this page and write to affected customers.

Yes. However, we have a high number of policyholders invested in the Property funds affected by this suspension across a variety of life, and pension products and it will take some time to work through this and ensure that we communicate clearly with our customers in sufficient detail. We’ll aim to communicate as soon as possible.

No, the letter is for information purposes only. We will write to you again when the suspension is lifted. In the meantime you can check this page for more information.

We cannot invest regular premiums into property funds while the suspension is in place. Instead, to allow continuity of investment, any regular premiums that would have been invested in the property fund will now be invested into the relevant cash fund for your product during the suspension period.

Due to the Property Fund suspension, we are unable to allocate any regular premiums to Property during the suspension period. The Cash Fund is being used at it is the most suitable alternative and is defined as the default fund to be used under a fund suspension scenario. You is free to choose to allocate these regular premiums to alternative funds if you so wish.

Most of our Cash Funds have a “no unit price reduction” guarantee – which means the value of units in the fund can’t go down. For those Cash funds which don’t currently have a “no unit price reduction” guarantee, we’ll ensure that you will be treated as if one had applied during the suspension period. This means that we may have to add additional units to your plan upon the lifting of the suspension to put you in the position you would have been if the fund had such a guarantee.

Any premiums paid before 5 December 2019 have been allocated as normal to the Property Funds affected by this suspension whilst we communicated the suspension arrangements to customers and put in place the processes for redirecting regular premiums during the suspension period.

No – the reallocation of premiums is to protect future premiums. Investment switches out of the property fund are currently not permitted.

No - If you would prefer to choose an alternative fund while the property fund is suspended, then you can. We do need you to send us a fund reallocation instruction to allow us to process this request.

Once the suspension is lifted, we will switch your resulting cash fund investment back into the property fund (free of any switch charge) and you will receive confirmation of the switch transaction when complete. If you have chosen another fund in the meantime, you will not automatically be switched to property.

If you choose a fund other than the cash fund for your premiums, you will not automatically be switched back and will remain in the fund you have chosen. If you continue to pay premiums into the cash fund and want to remain then we will inform you of this process when we write to you again when the fund unsuspends.

We’ll take the number of units that you have in the Cash Fund through redirected premiums and check what the value of these units is at the point the suspension is lifted and compare it to the value of these units if we had a “no unit price reduction” guarantee in place. If the unit price of redirected premiums is below the unit price that applied if we had a “no unit price reduction” guarantee, then we will add additional units to the Plan to make up the difference in the unit price. We will send you a statement showing any resulting transaction and the switch back to Cash on the lifting of the suspension. The number of units that you have in the Cash Fund may be reduced accordingly during the suspension period if any withdrawals are made – this includes any withdrawals to cover Ongoing Adviser Charges or Policy Charges where appropriate.