Suspended property funds collect £40m in management fees over 2020
£2.8m of capital locked away over three funds
Investors stuck in the M&G Property Portfolio have forked out the most in fees
Investors trapped in suspended open-ended property funds have paid out more than £40m in management fees over the course of 2020, with some still paying fees in 2021 as £2.8bn of investor capital remains locked away across three funds.
According to Investment Week calculations utilising fee and fund size data from Morningstar Direct and share class classifications from FE fundinfo, investors have shelled out approximately £40m in management.
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Through LGIM, the investment management arm, there is exposure to the vast sums now being poured into defined contribution pensions since the launch of near-compulsory workplace pensions in 2012. L&G not only offers a “mastertrust” to replace the thousands of individual company policies that were the bedrock of the old system of paternalistic employers, but provides the underlying investments.
Like others it is racing to gain a foothold in ESG strategies as younger investors take a more keen interest in what happens to their money. Older style defined-benefit plans may be all but extinct in the private sector but the legacy of decades of benefit entitlement means there is trillions of pounds of liabilities still held by corporates.
Legal & General saw flat movements in operating profit over the course of 2020, and a fall in profit after tax, although its retirement and investment management businesses grew.
So far, DC plans have largely been focused on the onset of auto-enrolment and changes to the regulatory framework - be it the ‘charge cap, ‘pension freedoms or consultations around ‘value for money , says Annabel Tonry, Executive Director at J.P. Morgan Asset Management (JPMAM).Download
In 2015 George Osborne, then the UK Chancellor of the Exchequer, decided that those age over 55 could take much more of their pension in cash. This has since opened up a range of possibilities for DC scheme members in the world of pensions.Download
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