Property funds have been less popular with investors over the last few years. Investors have sold their holdings, and the Funds are smaller. M&G Investments believes that withdrawals from the funds are likely to continue, and there is a risk this may accelerate in the future. As the funds reduce in size, it becomes necessary for the fund manager to sell some of the fund’s larger properties and buy smaller ones. Doing this will incur high transaction costs which will negatively impact the performance of the funds.
M&G Investments believes that the funds will continue to reduce in size, and after considering a number of options, they've decided that it's in the best interests of investors to close the funds as soon as practicable to allow for an orderly disposal of the funds’ assets and return the proceeds to investors.