Prospectus M&G Property Portfolio
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M&G Property Portfolio
Issued by M&G Securities Limited 27 February 2015
Prospectus
M&G Property PortfolioProspectus
M&G Property Portfolio
This document constitutes the prospectus for the M&G Property Portfolio
(the ‘Company’) which has been prepared in accordance with the Open-
Ended Investment Companies Regulations 2001 and the rules contained in
the Collective Investment Schemes Sourcebook published by the FCA as
part of its Handbook of Rules and Guidance.
This prospectus is dated and is valid as at 27 February 2015.
Copies of this prospectus have been sent to the Financial Conduct Authority
and National Westminster Bank Plc as Depositary.
The prospectus is based on information, law and practice at the date hereof
but where it refers to any statutory provision or regulation this includes any
modification or re-enactment that has been made. The Company is not
bound by any out of date prospectus when it has issued a new prospectus
and potential investors should check that they have the most recently
published prospectus.
M&G Securities Limited, the Authorised Corporate Director of the Company,
is the person responsible for the information contained in this prospectus. To
the best of its knowledge and belief (having taken all reasonable care to
ensure that such is the case) the information contained in this document
does not contain any untrue or misleading statement or omit any matters
required by the Regulations to be included in it. M&G Securities Limited
accepts responsibility accordingly. No person has been authorised by the
Company to give any information or to make any representations in
connection with the offering of Shares other than those contained in the
prospectus and, if given or made, such information or representations must
not be relied on as having been made by the Company. The delivery of this
prospectus (whether or not accompanied by any reports) or the issue of
Shares shall not, under any circumstances, create any implication that the
affairs of the Company have not changed since the date of this prospectus.
The distribution of this prospectus and the offering of Shares in certain
jurisdictions may be restricted. Persons into whose possession this
prospectus comes are required by the Company to inform themselves about
and to observe any such restrictions. This prospectus does not constitute an
offer or solicitation by anyone in any jurisdiction in which such offer or
solicitation is not authorised or to any person to whom it is unlawful to make
such offer or solicitation.
Warning: the contents of this document have not been reviewed by any
regulatory authority in Hong Kong. You are advised to exercise caution
in relation to this offer. If you are in any doubt about the contents of this
document you should obtain independent professional advice. In
particular, no interest in the Company will be issued to any person other than
the person to whom this document is addressed. In addition, (a) no offer or
invitation to subscribe for Shares in the Company may be made to the public
in Hong Kong; and (b) this document has not been approved by the
Securities and Futures Commission in Hong Kong or any other regulatory
authority in Hong Kong and accordingly interests in the Company may not be
offered or sold in Hong Kong by means of this document, other than in
circumstances which do not constitute an offer to the public for the purposes
of the Hong Kong Companies Ordinance and the Hong Kong Securities and
Futures Ordinance, as amended from time to time.
Shares in the Company are not listed on any investment exchange.
Potential investors should not treat the contents of this prospectus as advice
relating to legal, taxation, investment or any other matters and are
recommended to consult their own professional advisers concerning the
acquisition, holding or disposal of Shares.
The provisions of the Instrument of Incorporation are binding on each of its
Shareholders (who are taken to have notice of them).
This prospectus has been approved for the purpose of section 21(1) of the
Financial Services and Markets Act 2000 by M&G Securities Limited.
The Depositary is not a person responsible for the information contained in
this prospectus and accordingly does not accept any responsibility therefore
under the Regulations or otherwise.
If you are in any doubt about the contents of this prospectus you should
consult your professional adviser.
2 PAIF/210214/ENG/r02Contents
M&G Property Portfolio
Definitions 4 46 Complaints 21
1 The Company 6 47 Marketing outside the UK 21
2 Company structure 6 48 Genuine diversity of ownership 22
3 Classes of Share 6 49 Insurance 22
4 Management and administration 6 50 Professional Liability 22
5 The Depositary 7 51 Changes to the Funds 22
6 The Investment Manager 7 52 Rights against service providers 22
7 The Property Manager 7 53 Risk factors 23
8 Administrator and Registrar 7
Appendix 1 - 25
9 The Auditor 7
Details of the M&G Property Portfolio
10 The Standing Independent Valuer 8
11 Register of Shareholders 8 Appendix 2 - 26
12 Fund Accounting and Pricing 8 Investment management and borrowing powers of the Company
13 Collateral Management 8
Appendix 3 - 36
14 Conflicts of Interest 8
Eligible markets
15 Buying and selling Shares 8
16 Buying Shares 8 Appendix 4 - 37
17 Selling Shares 9 Performance bar charts and graphs
18 Switching and Converting Shares 10
Appendix 5 - 38
19 Dealing charges 10
Other collective investment schemes of the ACD
20 Other dealing information 11
21 Suspension of dealings in the Company 12 Directory 39
22 Money laundering 12
23 Governing law 13
24 Valuation of the Company 13
25 Calculation of the Net Asset Value 13
26 Prices per Share in each Class 15
27 Pricing basis 15
28 Publication of prices 15
29 Risk factors 15
30 Charges and Expenses 15
31 Stocklending 17
32 Investment Accounting Fee 17
33 Shareholder meetings and voting rights 17
34 Taxation 18
35 Tax reporting 19
36 Income equalisation 19
37 Winding up of the Company 19
38 Accounting periods 20
39 Income allocations 20
40 Annual Reports 20
41 Documents of the Company 21
42 Risk Management and other information 21
43 Notices 21
44 Fair Treatment of Investors 21
45 Preferential Treatment 21
Customer Helpline: 0800 390 390
PAIF/210214/ENG/r02 3Definitions
M&G Property Portfolio
Accumulation Share: a Share in the Company in respect of which income Dealing Day: Monday to Friday except for bank holidays in England and
allocated thereto is credited periodically to capital pursuant to the Wales and other days at the ACD’s discretion;
Regulations;
Dealing Price: each price at which an instruction to purchase or redeem
ACD: M&G Securities Limited, the Authorised Corporate Director of the Shares is carried out being the offer and bid prices respectively;
Company;
Depositary: National Westminster Bank Plc, the depositary of the Company;
ACD Agreement: the agreement entered into between the Company and the
Efficient Portfolio Management: means the use of techniques and
ACD authorising the ACD to manage the affairs of the Company;
instruments which relate to transferable securities and approved money-
AIF: refers to an alternative investment fund and has the same meaning as market instruments and which fulfil the following criteria:
listed in the glossary to the FCA Rules.
(a) they are economically appropriate in that they are realised in a
AIFM: refers to an alternative investment fund manager and has the same cost effective way; and
meaning as listed in the glossary to the FCA Rules.
(b) they are entered into for one or more of the following specific aims:
AIFMD: refers to the Alternative Investment Fund Managers Directive
(2011/61/EU) and has the same meaning as listed in the glossary to the FCA - reduction of risk;
Rules. - reduction of cost;
Approved Bank in relation to a bank account opened by the Company: - generation of additional capital or income for the scheme with a risk level
(a) if the account is opened at a branch in the United Kingdom; which is consistent with the risk profile of the scheme and the risk
diversification rules laid down in COLL
(i) the Bank of England; or
Eligible Institution: one of certain eligible institutions being a BCD credit
(ii) the central bank of a member state of the OECD; or institution authorised by its home state regulator or an Investment Firm
authorised by its home state regulator as defined in the glossary of
(iii) a bank or a building society; or definitions in the FCA Handbook;
(iv) a bank which is supervised by the central bank or other Feeder Fund: the M&G Feeder of Property Portfolio;
banking regulator of a member state of the OECD; or
Fraction: a smaller denomination Share (on the basis that one thousand
(b) if the account is opened elsewhere: smaller denomination Shares make one larger denomination Share);
(i) a bank in (a); or FCA: the Financial Conduct Authority;
(ii) a credit institution established in an EEA State other than in Income Share: a Share in the Company in respect of which income allocated
the United Kingdom and duly authorised by the relevant thereto is distributed periodically to the holders thereof pursuant to the
home state regulator; or Regulations;
(iii) a bank which is regulated in the Isle of Man or the Channel Instrument of Incorporation: the instrument of incorporation of the Company
Islands; or as amended from time to time;
Investment Manager: M&G Investment Management Limited;
(c) a bank supervised by the South African Reserve Bank;
Intermediate Unitholder: a firm whose name is entered in the register of the
(d) any other bank that:
Company, or which holds Shares indirectly through a third party acting as a
(i) is subject to regulation by a national banking regulator; nominee, and which:
(ii) is required to provide audited accounts; (a) is not the beneficial owner of the relevant Share; and
(iii) has minimum net assets of £5 million (or its equivalent in (b) does not manage investments on behalf of the relevant beneficial
any other currency at the relevant time) and has a surplus owner of the Share; or
revenue over expenditure for the last two financial years; and
(c) does not act as a depositary of a collective investment scheme or
(iv) has an annual audit report which is not materially qualified on behalf of such a depositary in connection with its role in
holding property subject to the scheme;
Associate: an associate in accordance with the FCA Handbook of Rules and
Guidance; Investment Firm: an investment firm that provides investment services as
defined in the glossary of definitions in the FCA handbook;
Base Currency: the base currency of the Company is Sterling;
ISA: an individual savings account under the Individual Savings Account
Body Corporate: a body corporate incorporated in any jurisdiction (including Regulations 1998 (SI 1998/1870 as amended from time to time);
the UK) or any entity treated as a body corporate for tax purposes in any
jurisdiction with which the UK has any form of double tax treaty or other mainly: within the investment objective, an amount greater than 70%;
agreement to relieve double tax which has effect under the UK’s tax Member State: those countries which are members of the European Union
legislation by Order in Council; or the European Economic Area at any given time;
BCD Credit Institution: a credit institution under the Banking Consolidation Net Asset Value or NAV: the value of the Scheme Property of the Company
Directive; less the liabilities of the Company as calculated in accordance with the
Class or Classes: in relation to Shares, means (according to the context) all of Company’s Instrument of Incorporation;
the Shares related to the Company or a particular class or classes of Share PAIF: an open-ended investment company which is a Property Authorised
related to the Company; Investment Fund as defined in Part 4A of the Tax Regulations;
COLL: refers to the appropriate chapter or rule in the COLL Sourcebook Property Assets: the Company’s immovable property investments as defined
issued by the FCA; in the FCA Regulations;
COLL Sourcebook: the Collective Investment Schemes Sourcebook issued by Property Investment Business: as defined in the Tax Regulations, and
the FCA as amended or re-enacted from time to time; summarised in Appendix 2;
Client Account: a bank account held by us in accordance with the FCA Property Manager: Prudential Property Investment Managers Limited;
Handbook of Rules and Guidance;
the Regulations: the Open-Ended Investment Companies Regulations 2001
Company or Fund: M&G Property Portfolio; and the rules contained in the COLL Sourcebook;
4 PAIF/210214/ENG/r02Definitions
M&G Property Portfolio
SDRT: stamp duty reserve tax;
Scheme Property: the property of the Company to be given to the Depositary
for safekeeping, as required by the Regulations;
Share or Shares: a share or shares in the Company (including larger
denomination Shares and Fractions);
Shareholder: a holder of a registered Share in the Company;
Standing Independent Valuer: Knight Frank LLP;
Tax Regulations: the Authorised Investment Funds (Tax) Regulations 2006
(SI 2006/964), as amended from time to time;
XD date: the XD (or Ex-Dividend) date is the date on which the income is
removed from the price of an Income Share pending the payment of a
distribution.
PAIF/210214/ENG/r02 5Prospectus
M&G Property Portfolio
1 The Company of such Shares immediately after the end of an accounting period
reduces to reflect these allocations of income.
1.1 M&G Property Portfolio is an Open-Ended Investment Company
with variable capital, incorporated in England and Wales under 3.4 Holders of Accumulation Shares are not entitled to be paid the
registered number IC000952 and authorised by the Financial income attributable to such Shares but that income is automatically
Conduct Authority with effect from 16 October 2012. The Company transferred to (and retained as part of) the capital assets of the
has been established for unlimited duration. Company immediately after the relevant interim and / or annual
accounting dates. The price of such Shares continues to reflect this
1.2 The Company is a non-UCITS Retail Scheme. The Company retention of the income entitlement, which will be transferred either
qualifies as a PAIF for tax purposes and an AIF for the purposes of gross or after deduction of applicable tax, as appropriate.
AIFMD.
3.5 Where the Company has different Classes of Share available, each
1.3 The Head Office of the Company is at Laurence Pountney Hill, Class may attract different charges and expenses and so monies
London EC4R 0HH and is also the address of the place in the may be deducted from Classes in unequal proportions. For this and
United Kingdom for service on the Company of notices or other like reasons, the proportionate interests of the Classes within the
documents required or authorised to be served on it. Company will vary from time to time.
1.4 The base currency of the Company is pounds sterling. 3.6 Holders of Income Shares may convert all or some of their Shares
to Accumulation Shares of the same Class, and holders of
1.5 The maximum share capital of the Company is currently
Accumulation Shares may convert all or some of their Shares to
£250,000,000,000 and the minimum is £100. Shares in the
Income Shares of the same Class. Details of this conversion
Company have no par value and therefore the share capital of the
facility are set out in paragraph 18 of this document.
Company at all times equals the Company’s current Net Asset
Value. 3.7 Sterling Class R Shares will be available only to Intermediate
Unitholders or where the deal has been arranged by a financial
1.6 Shareholders in the Company are not liable for the debts of the
adviser.
Company.
3.8 Sterling Class F Shares are available only to the Feeder Fund.
2 Company structure
2.1 The investment objective, investment policy and other details of the
4 Management and administration
Company are set out in Appendix 1. The investment and borrowing 4.1 Authorised Corporate Director
powers under the COLL Sourcebook applicable to the Company
are set out in Appendix 2 and the eligible markets on which the 4.1.1 The Authorised Corporate Director of the Company is
Company can invest are set out in Appendix 3. M&G Securities Limited which is a private company limited
by shares incorporated in England and Wales under the
3 Classes of Share Companies Acts 1862 to 1900 on 12 November 1906. The
ultimate holding company of the ACD is Prudential plc, a
3.1 Several Share Classes may be issued in respect of the Company. company incorporated in England and Wales. M&G
The Instrument of Incorporation allows gross Income and gross Securities Limited is authorised by the FCA as a full scope
Accumulation Shares to be issued as well as net Income and net AIFM.
Accumulation Shares. Net Shares are Shares in respect of which
income allocated to them is distributed periodically to the relevant 4.1.2 Registered office and head office:
Shareholders (in the case of income Shares) or credited Laurence Pountney Hill, London EC4R 0HH.
periodically to capital (in the case of Accumulation Shares), in
either case in accordance with relevant tax law net of any tax Share capital:
deducted or accounted for by the Company. Gross Shares are
Authorised £100,000
Income or Accumulation Shares where, in accordance with relevant
tax law, distribution or allocation of income is made without any UK Issued and paid-up £100,000
income tax being deducted or accounted for by the Company.
Directors:
The Share Classes in issue are shown in Appendix 1. These are
one or more of the following: Mr Gary Cotton,
Sterling Class A Net Income Shares Mr Philip Jelfs,
Sterling Class A Net Accumulation Shares Mr Martin Lewis,
Sterling Class X Net Income Shares Mr Graham MacDowall,
Sterling Class R Net Income Shares Mr Laurence Mumford,
Sterling Class R Net Accumulation Shares Mr William Nott,
Sterling Class I Net Income Shares All of the directors have significant business activities
which are not connected to those of the ACD but of other
Sterling Class I Net Accumulation Shares companies within the M&G Group.
Sterling Class D Net Income Shares 4.1.3 The ACD is responsible for managing and administering
Sterling Class D Net Accumulation Shares the Company’s affairs in compliance with the Regulations.
Other collective investment schemes for which the ACD
Sterling Class F Net Income Shares has these responsibilities are set out in Appendix 5.
3.2 The Company may make available such further Classes of Share 4.2 Terms of appointment
as the ACD may decide.
4.2.1 The ACD Agreement provides that the appointment of the
3.3 Holders of Income Shares are entitled to be paid the income ACD is for an initial period of three years and thereafter
attributed to such Shares on the relevant interim and annual may be terminated upon 12 months written notice by either
allocation dates either gross or net of tax, as appropriate. The price the ACD or the Company although in certain
circumstances the agreement may be terminated forthwith
6 PAIF/210214/ENG/r02Prospectus
M&G Property Portfolio
by notice in writing by the ACD to the Company or the the safe keeping of the Scheme Property and also (in
Depositary, or by the Depositary or the Company to the certain circumstances) exempts the Depositary from
ACD. The ACD cannot be replaced until the FCA has liability.
approved the appointment of another director in place of
5.5.4 The Depositary is entitled to the fees, charges and
the retiring ACD. The ACD Agreement may be inspected at
expenses detailed under ‘Depositary’s Fee, Charges and
the offices of the ACD during normal business hours by
Expenses’ in paragraph 32.
any Shareholder or any Shareholder’s duly authorised
agent. Alternatively, a copy of the ACD Agreement may be 5.5.5 The Depositary has appointed firms of solicitors in
sent to any Shareholder at his request within 10 days of the appropriate jurisdictions to act as custodians of the
Company’s receipt of such request. Property Assets.
4.2.2 The ACD is entitled to its pro rata fees and expenses to the 5.5.6 The Depositary has appointed State Street Bank and Trust
date of termination and any additional expenses Company to act as custodian of the non-Property Assets.
necessarily realised in settling or realising any outstanding The relevant arrangements prohibit State Street Bank and
obligations. No compensation for loss of office is provided Trust Company as such custodian from releasing
for in the agreement. The ACD Agreement provides documents of title into the possession of a third party
indemnities by the Company to the ACD other than for without the consent of the Depositary.
matters arising by reason of the ACD’s negligence, default,
breach of duty or breach of trust in the performance of the 6 The Investment Manager
ACD’s duties and obligations.
The ACD has appointed M&G Investment Management Limited
4.2.3 The ACD is under no obligation to account to the (“MAGIM”) to provide investment management and advisory
Depositary or the Shareholders for any profit it makes on services in respect of the Company. The Investment Manager has
the issue or re-issue of Shares or cancellation of Shares authority to make decisions on behalf of the Company and the ACD
which it has redeemed. The fees to which the ACD is in respect of the acquisition and disposal of property and to advise
entitled are set out in paragraph 29. in respect of the rights associated with the holding of such property.
The Investment Manager has been appointed under an agreement
5 The Depositary between the ACD and the Investment Manager whereby the ACD
accepts responsibility for all these services provided by the
National Westminster Bank Plc is the Depositary of the Company.
Investment Manager to the Company. The investment management
The Depositary is a public limited company incorporated in England
agreement may be terminated on six months written notice by the
and Wales. Subject to the Regulations the Depositary is
Investment Manager or the ACD, or immediately if the ACD
responsible for the safekeeping of the property of the Company
believes this is in the best interests of Shareholders.
entrusted to it and has a duty to take reasonable care to ensure that
the Company is managed in accordance with the provisions of the The Investment Manager’s principal activity is acting as an
COLL Sourcebook relating to the pricing of, and dealing in, Shares investment manager and it is an Associate of the ACD by being a
of the Company and to the allocation of the income of the subsidiary of Prudential plc.
Company. The appointment of the Depositary was made under an
agreement between the Company, the ACD and the Depositary. 7 The Property Manager
5.1 Registered office: The ACD has appointed Prudential Property Investment Managers
135 Bishopsgate, London, EC2M 3UR Ltd (PruPIM) to act as property manager and undertake the
implementation of certain activities in respect of Property Assets.
5.2 Head office:
These include, but are not limited to, the implementation of
135 Bishopsgate, London, EC2M 3UR investment transactions, the formulation and implementation of
asset strategies, development and project management investment
5.3 Ultimate holding company:
brokerage, accounting and financial reporting, and the appointment
The Royal Bank of Scotland Group plc. and direction of specialist advisers and consultants.
5.4 Principal business activity: PruPIM will also be responsible for the day to day management of
the Property Assets, including collection of rents and other
The principal business activity of the Depositary is banking. payments and payments of revenue expenses and for all leasing
5.5 Terms of appointment: activity in respect of the Property Assets. PruPIM may delegate
these activities to specialist advisers.
5.5.1 The Depositary provides its services under the terms of a
depositary agreement between the Company and the 8 Administrator and Registrar
Depositary (the ‘Depositary Agreement’). Subject to the
Regulations, the Depositary has full power under the The ACD employs International Financial Data Services (UK)
Depositary Agreement to delegate (and authorise its sub- Limited (‘IFDS’) to provide certain administration services and act
delegates to sub-delegate) all or any part of its duties as as registrar to the Company.
Depositary.
9 The Auditor
5.5.2 The Depositary Agreement may be terminated by three
months notice given by either the Company or the 9.1 The auditor of the Company is Ernst & Young LLP of 10 George
Depositary, provided that the Depositary may not Street, Edinburgh, EH2 2DZ.
voluntarily retire except on the appointment of a new
Depositary. 9.2 The Auditors shall, with respect to the assets of the Company, carry
out their duties in accordance with all applicable laws, rules and
5.5.3 The Depositary Agreement contains indemnities by the regulations, including the audit of the accounting information
Company in favour of the Depositary against (other than in contained in the annual report of the Company.
certain circumstances) any liability incurred by the
Depositary as a consequence of its safe keeping of any of
the Scheme Property or incurred by it as a consequence
of the safe keeping of any of the Scheme Property by
anyone retained by it to assist it to perform its functions of
PAIF/210214/ENG/r02 7Prospectus
M&G Property Portfolio
10 The Standing Independent Valuer calculated every Dealing Day at the valuation point (12.00 noon UK
time).
The ACD has, with the approval of the Depositary, appointed Knight
Frank LLP to act as the Company’s standing independent valuer to 15.2 Subject to paragraphs 17.2 and 20.6.5, postal deals received at our
value the Property Assets as described under clause 25. postal dealing address and requests communicated by other
means to the ACD before the valuation point will be dealt with at the
The Standing Independent Valuer must value all Property Assets price calculated on that Dealing Day; subject to 15.3, 17.2 and
held within the Scheme Property: 20.6.5, requests received after the valuation point will be dealt with
at the prices calculated on the next following Dealing Day.
(i) on the basis of a full valuation with physical inspection (including,
where the property is or includes a building, internal inspection), at 15.3 Dealing requests received from the Feeder Fund on a Dealing Day
least once a year; after the valuation point but before 16.00 UK time, or such other
time as may be stipulated by the ACD and the Depositary, may still
(ii) on the basis of a review of the last full valuation, at least once a
be accepted by the ACD and dealt with at the price calculated on
month; and,
that Dealing Day.
(iii) by providing a valuation report prior to the purchase of a
15.4 The ACD reserves the right to impose a maximum transaction size
Property Asset, except where circumstances require the valuation
of £10 million or 10% of the value of the Company (whichever is
report to be provided by an alternate appropriate valuer.
the lower) in respect of Sterling Class A Shares, Sterling Class R
Knight Frank LLP are one of the largest surveying and real estate Shares, Sterling Class I Shares and Sterling Class D Shares.
consultants in the UK and their appointment is governed by the
15.5 A maximum transaction size of £30,000 will apply to Sterling Class
rules of the Royal Institution of Chartered Surveyors, in particular
X Shares, but may be waived at the discretion of the ACD.
the Appraisal and Valuation Standards, as amended from time to
time. 15.6 The ACD will not impose a maximum transaction size in respect of
transactions relating to the M&G ISA or M&G Junior ISA, subject to
11 Register of Shareholders regulatory limits applicable to ISAs and Junior ISAs.
The Register of Shareholders is maintained by IFDS at its office at 15.7 The ACD does not currently permit the transfer of Shares by
IFDS House, St Nicholas Lane, Basildon, Essex SS15 5FS and electronic means but may do so in the future at its discretion. For
may be inspected at that address during normal UK business hours further details please contact the ACD.
by any Shareholder or any Shareholder’s duly authorised agent.
16 Buying Shares
12 Fund Accounting and Pricing
16.1 Procedure for investors in Sterling Share Classes
The ACD has appointed State Street Bank and Trust Company to
undertake the fund accounting and pricing functions on behalf of 16.1.1 On any given Dealing Day the ACD will be willing to sell
the Company. Shares of at least one Class in the Company. Shares can
be bought as a lump sum investment.
13 Collateral Management 16.1.2 Postal applications must be made on application forms
obtained from the ACD. Alternatively, lump sum investment
Where the Company enters into OTC (Over The Counter) derivative
can be made under approved circumstances by
transactions, JPMorgan Chase Bank, N.A. will provide
telephoning M&G’s Customer Dealing Line 0800 328 3196
administrative services in connection with the collateral
between 8.00am and 6.00pm UK time on Dealing Days or
management functions.
by visiting the ACD’s website: www.mandg.co.uk.
14 Conflicts of Interest 16.1.3 The ACD has the right to reject, on reasonable grounds
relating to the circumstances of the applicant, any
The ACD, the Depositary, the Investment Manager, the property application for Shares in whole or part, and in this event the
manager and the standing independent valuer are or may be ACD will return any money sent, or the balance of such
involved in other financial, investment and professional activities monies, at the risk of the applicant. The ACD may also
which may, on occasion, cause conflicts of interest in the cancel any previously accepted request for the issue of
management of the Company. In addition, the Company may enter Shares in the event of either non-payment of the amount
into transactions at arm’s length with companies in the same group due, including any provision for SDRT, or undue delay in
as the ACD. payment by the applicant, including the non-clearance of
The Depositary may, from time to time, act as depositary of other cheques or other documents presented in payment.
funds. 16.1.4 The ACD also has the right to reject an application for
Each of the parties will, to the extent of their ability and in Shares of any amount if, with the agreement of the
compliance with the FCA Regulations, ensure that the performance Depositary, it deems the transaction not to be in the best
of their respective duties will not be impaired by any such interests of the Shareholders.
involvement. 16.1.5 Any subscription monies remaining after a whole number
of Shares has been issued may not be returned to the
15 Buying and selling Shares applicant. Instead, Fractions may be issued in such
circumstances. A Fraction is equivalent to one thousandth
15.1 The address for postal dealing is P.O. Box 9039, Chelmsford, CM99
of a larger denomination Share.
2XG. Telephone deals can be placed between 8.00 am and 6.00
pm UK time on each Dealing Day (except for Christmas Eve and 16.1.6 Where Accumulation Shares are not issued, a Shareholder
New Year’s Eve when the office closes early) for the sale and may choose to have their distributions automatically re-
redemption of Shares. Subject to paragraphs 17.2 and 20.6.5, invested in the Company. Shares purchased with
deals will be effected at prices determined at the next valuation reinvested distributions are bought at the price calculated
point following receipt of the request, i.e. on a forward pricing basis. on the re-investment day, which falls fourteen days before
Requests may be made by post, telephone or any electronic or the date on which the distribution is paid.
other means which the ACD may from time to time determine,
either directly or via an authorised intermediary. Prices are 16.1.7 Shares may be registered in the joint names of up to four
individuals. Shares bought for a minor’s benefit are
8 PAIF/210214/ENG/r02Prospectus
M&G Property Portfolio
registered in an adult’s name and may also be designated 16.5.2.2 some or all of the Shares on behalf of one
by the addition of the minor’s initials after the adult’s name. or more other Bodies Corporate, in which
case it must further certify that:
16.1.8 Sterling Class R Shares are available only to Intermediate
Unitholders or where the deal has been arranged by a 16.5.2.2.1 its own interest (if any) is less
financial adviser. than 8% of the NAV;
16.1.9 Sterling Class F Shares are available only to the Feeder 16.5.2.2.2 the interest of each beneficial
Fund. owner for which it holds
Shares is less than 8% of the
16.2 Documentation
NAV; and
16.2.1 A contract note giving details of the Shares purchased and
16.5.2.2.3 each of the other Bodies
the price used will be issued by the end of the business day
Corporate has given the
following the valuation point by reference to which the price
undertakings described in
is determined, together with, where appropriate, a notice of
16.5.3 or 16.5.4 (as
the applicant’s right to cancel.
appropriate).
16.2.2 Payment for Shares purchased by post must accompany
16.5.3 Any Body Corporate that acquires Shares and holds them
the application; payment for Shares purchased by other
other than as beneficial owner must undertake to disclose
means must be made by no later than four business days
to the ACD the names and Shareholding of each Body
after the valuation point following receipt of the instructions
Corporate on whose behalf it is holding Shares.
to purchase.
16.5.4 Any Body Corporate that acquires Shares as beneficial
16.2.3 Currently Share certificates will not be issued in respect of
owner (whether the Shares are registered in its name or
Shares. Ownership of Shares will be evidenced by an
the name of a nominee or other person) must give the
entry on the Company’s Register of Shareholders.
following undertakings:
Statements in respect of periodic allocations of income of
the Company will show the number of Shares held by the 16.5.4.1 not to acquire 8% or more of the NAV; and,
recipient in the Company in respect of which the allocation
16.5.4.2 on becoming aware that it has acquired or
is made. Individual statements of a Shareholder’s Shares
holds 8% or more of the NAV, to reduce its
will also be issued at any time on request by the registered
holding to 6% or less of the NAV.
holder (or, when Shares are jointly held, the first named
holder). 16.5.5 In the event that a Body Corporate is close to reaching the
8% investment limit but wishes to remain invested in the
16.3 Minimum subscriptions and holdings
Company, it should contact the ACD with a view to
16.3.1 The minimum initial lump sum subscriptions for Shares and switching its Shares in the Company for units in the Feeder
the minimum holding in the Company are set out in Fund.
Appendices 1.
16.3.2 The ACD may at its discretion accept subscriptions for
17 Selling Shares
lower than the minimum amounts. 17.1 Procedure for investors in Sterling Share Classes
16.3.3 If at any time a Shareholder’s holding is below the specified 17.1.1 Subject to clauses 17.2 and 17.4 Shareholders have the
minimum, the ACD reserves the right to sell the Shares right to sell Shares back to the ACD or require that the ACD
and send the proceeds to the Shareholder or at its absolute arranges for the Company to buy their Shares on any
discretion convert the Shares to another Share Class Dealing Day unless the value of Shares which a
within the same Company. Shareholder wishes to sell will mean that the Shareholder
will hold Shares with a value less than the required
16.4 Limited Issue Arrangements
minimum holding for the Company, in which case the
16.4.1 The ACD reserves the right to limit the issue of any Shares Shareholder may be required to sell the entire holding.
in circumstances where the liquidity within the Company is
17.1.2 Requests to sell Shares may be made by post, telephone,
deemed to be detrimental to the Company’s performance.
or any electronic or other means which the ACD may from
16.4.2 In such circumstances, the ACD may still issue Shares time to time determine, either directly or via an authorised
where the proceeds of that issue can be invested without intermediary; the ACD may require telephonic or electronic
compromising the Company’s objective or materially requests to be confirmed in writing.
prejudicing existing Shareholders, such as on the
17.2 Limited Redemption Arrangements
reinvestment of distribution income, or the investment of
regular contributions received by the ACD or an Associate. 17.2.1 In order to protect the liquidity of the Company, requests for
redemptions of Sterling Class D Shares are subject to a
16.4.3 The Manager will return any cheques and application
notice period. Redemption requests received by the
forms received whilst the limited issue provision is in force.
valuation point on a particular business day will be
16.5 Bodies Corporate and Nominees acquiring Shares redeemed at the price calculated at the valuation point on
the first business day after 90 days from the date of receipt
16.5.1 Bodies Corporate (excluding nominees acquiring Shares) of the redemption request.
that wish to invest in the Company may do so indirectly
through the Feeder Fund. 17.2.2 At its absolute discretion, the ACD may waive the relevant
notice period (in whole or in part) provided that there is
16.5.2 The ACD permits investment in the Company by Bodies sufficient liquidity in the Company and provided that it
Corporate (whether or not through a custody or nominee ensures that all redemption requests for Sterling Class D
arrangement) but only if the Body Corporate in question Shares are completed in the order in which they are
certifies that it holds: received.
16.5.2.1 all the Shares as beneficial owner; or
PAIF/210214/ENG/r02 9Prospectus
M&G Property Portfolio
17.2.3 Once a redemption request is submitted it cannot be 18.2 Where available, and at the discretion of the ACD, holders are
withdrawn or cancelled unless the ACD agrees to such entitled (subject to the restrictions described in paragraphs 16, 17
withdrawal or cancellation. and 20.6.5) to switch all or part of their Shares for units in the
Feeder Fund provided they are eligible to hold those units. The
17.3 Documents the seller will receive
number of new units issued will be determined by reference to the
17.3.1 A contract note giving details of the Shares sold and the respective prices of new units and old Shares at the valuation point
price used will be sent to the selling Shareholder (the first applicable at the time the old Shares are repurchased and the new
named, in the case of joint Shareholders) or to an units are issued. Such switches may be subject to a fee (see
authorised agent not later than the end of the business day paragraph 19.3). For persons subject to UK taxation, under current
following the valuation point by reference to which the price HM Revenue & Customs rules this will not be a realisation for the
is determined. Subject to paragraph 17.2 and 20.6.5, purposes of capital gains taxation.
payment of proceeds will be made no more than four
18.3 Conversions of Income Shares to Accumulation Shares and of
business days after the later of:
Accumulation Shares to Income Shares of the same Class are
• receipt by the ACD, when required, of sufficient undertaken by reference to the respective Share prices. For
written instructions duly signed by all the relevant persons subject to UK taxation, under current HM Revenue &
Shareholders and completed as to the appropriate Customs practice this will not be a realisation for the purposes of
number of Shares, together with any other capital gains taxation.
appropriate evidence of title; and
19 Dealing charges
• the valuation point following receipt by the ACD of
the request to sell. 19.1 Initial charge
17.3.2 The requirement for sufficient written instructions is The ACD may impose a charge on the buying of Shares. This
normally waived if all the following conditions are met: charge is included in the price of Shares purchased. The current
level in relation to the Company is set out in Appendix 1 and is
• dealing instructions are given by the registered expressed as a percentage of the subscription amount. The charge
holder in person; is subject to discounts that the ACD at its absolute discretion may
• the holding is registered in a sole name; apply from time to time. Increases from the current rates of charge
can only be made in accordance with the COLL Sourcebook and
• the sale proceeds are to be made payable to the after the ACD has revised the prospectus to reflect the increased
registered holder at their registered address, which rate.
has not changed within the previous 30 days; and
19.2 Redemption charge
• the total amount payable in respect of sales by that
holder on one business day does not exceed 19.2.1 The ACD may make a charge on the cancellation and
£15,000. redemption (including transfer) of Shares. At present, a
redemption charge is levied only on Sterling Class X
17.4 Minimum redemption Income Shares. Other Shares issued and bought, and
persons known to the ACD to have made arrangements for
Subject to the Shareholder maintaining the minimum holding stated
the regular purchase of other Shares while this prospectus
in this prospectus, part of a Shareholder’s holding may be sold but
is in force, will not be subject to any redemption charge
the ACD reserves the right to refuse a request to sell Shares if the
introduced in the future in respect of those Shares.
value of the Class of Shares of the Company is less than the sum
Currently, those Shares deemed to carry a redemption
specified in Appendix 1.
charge will carry a reducing redemption charge calculated
in accordance with the table below. With Accumulation
18 Switching and Converting Shares Shares, where any income is reinvested back into the
18.1 Holders are entitled (subject to the restrictions described in share price, the valuation when calculating a redemption
paragraphs 16, 17 and 20.6.5) to convert all or part of their Shares will include the capital increment associated with this
in a Class for Shares in another Class in the Company provided reinvested income. In relation to the imposition of a
they are eligible to hold Shares of that Class. Requests to convert redemption charge as set out above, where Shares of the
between Share Classes must be submitted using the appropriate Class in question have been purchased at different times
form available from the ACD. Instructions to convert between Share by a redeeming Shareholder, the Shares to be redeemed
Classes will be executed within three Dealing Days of receipt of a shall be deemed to be the Shares which incur the least
valid instruction. The number of new Shares issued will be cost to the Shareholder and thereafter the Shares
determined by reference to the respective prices of new Shares purchased first in time by that Shareholder.
and old Shares. These respective prices are calculated net of
Redemption charge table
income tax. The impact of using net prices is that a conversion of
Shares from one Class to another Class with a lower ACD’s annual The deduction from the mid value for redemption before
remuneration (see Appendix 1) is that the Company’s total tax the following anniversaries on the Sterling Class X Income
charge will increase and this increase will be borne by all and Accumulation Shares would be:
Shareholders in the receiving Share Class. This approach has been
agreed with the Depository subject to the total impact to 1st year 4.5%
Shareholders being immaterial. Where the ACD determines at its
2nd year 4.0%
absolute discretion that Share Class conversions are materially
prejudicial to the Shareholders of a Share Class, instructions to 3rd year 3.0%
convert between Share Classes will only be executed on the
Dealing Day following the relevant sub-fund’s XD date. In such 4th year 2.0%
circumstances, instructions to convert between Share Classes
5th year 1.0%
must be received by the ACD no sooner than ten business days
before the sub-fund’s relevant XD date All conversions may be Thereafter Nil
subject to a fee (see paragraph 19.3). For persons subject to UK
taxation, under current HM Revenue & Customs practice this will 19.2.2 The ACD may not introduce or increase a redemption
not be a realisation for the purposes of capital gains taxation. charge on Shares unless:
10 PAIF/210214/ENG/r02Prospectus
M&G Property Portfolio
19.2.2.1 the ACD has complied with the Regulations principal SDRT charge payable by the investor by
in relation to that introduction or change; reference to the value of chargeable securities redeemed
and in this type of transaction.
19.2.2.2 the ACD has revised the prospectus to 20.6 Bodies Corporate holding Shares
reflect the introduction or change and the
20.6.1 In accordance with HMRC rules, no Body Corporate may
date of its commencement and has made
be beneficially entitled directly or indirectly to 10% or more
the revised prospectus available.
of the NAV. However, in order to try and avoid breaches of
19.2.3 In the event of a change to the rate or method of this rule, the Company may operate such that no Body
calculation of a redemption charge, details of the previous Corporate may be beneficially entitled directly or indirectly
rate or method of calculation will be available from the to 8% or more of the NAV.
ACD.
20.6.2 If a Body Corporate should be or becomes beneficially
19.3 Switching and conversion fee entitled directly or indirectly to 8% or more of the NAV or
the ACD reasonably believes this to be the case, then the
19.3.1 On the switching or conversion of Shares the ACD
ACD may, and must if the holding represents 10% or more
reserves the right to impose a fee. The fee will not exceed
of NAV, treat a proportion of the Shares representing the
an amount equal to the aggregate of the then prevailing
excessive holding (or the proportion it reasonably believes
redemption charge (if any) in respect of Shares sold and
to be an excessive holding) as “affected Shares” for the
the initial charge (if any) in respect of new Shares (or units)
purposes of 20.7 and the provisions of that paragraph will
and is payable to the ACD.
apply to them except that for thirty days there shall be
19.3.2 If the switch would be a large deal for purposes of SDRT substituted “as soon as reasonably possible”. Typically, the
(see paragraph 20.5) then applicable further charges may proportion of Shares treated as “affected Shares” will be a
be imposed. Subject to this, the ACD will normally waive number sufficient to reduce the holding to 6% of NAV.
the initial charge (if any) if a switch is made to the same
20.6.3 In addition, the ACD at its discretion may transfer all or part
class of shares or units within a different fund.
of the Shareholding of a Body Corporate referred to in
20.6.2 into the Feeder Fund in exchange for the issue to
20 Other dealing information such Body Corporate of units in the Feeder Fund.
20.1 Large Deal Provision 20.6.4 In accordance with COLL 6.2.23R, where the ACD
Where a person places a deal or series of deals that total in excess becomes aware that a Body Corporate holds more than
of £50,000 for the same valuation point, the Dealing Price may be 10% of the NAV, it will notify the Body Corporate of that fact
calculated on a different basis from the usual Dealing Price. and not pay any income distribution to them.
20.2 In specie issues and redemptions 20.6.5 Additionally, in accordance with COLL 4.2.5R 22A(3), in the
event that the ACD reasonably considers that a Body
20.2.1 At its absolute discretion the ACD may agree or determine Corporate holds more than 10% of the NAV, the ACD is
that instead of payment in cash to, or from, the entitled to delay any redemption or cancellation of Shares
Shareholder for Shares in the Company, the settlement of if the ACD reasonably considers such action to be
an issue or redemption transaction may be effected by the necessary in order to enable an orderly reduction of the
transfer of property into or out of the assets of the holding below 10%, and if it is in the interests of
Company on such terms as the ACD shall decide in Shareholders as a whole.
consultation with the Investment Manager and the
Depositary. In the case of redemptions, the ACD shall give 20.7 Restrictions on dealing
notice to the Shareholder prior to the redemption proceeds 20.7.1 The ACD may from time to time impose such restrictions
becoming payable of its intention to transfer property to the as it may think necessary for the purpose of ensuring that
Shareholder and, if required by the Shareholder, may no Shares are acquired or held by any person in breach of
agree to transfer to the Shareholder the net proceeds of the law or governmental regulation (or any interpretation of
the sale of such property. a law or regulation by a competent authority) of any
20.2.2 The ACD may also offer to sell an investor’s property and country or territory. In this connection, the ACD may, inter
invest the proceeds by purchasing Shares in the Company, alia, reject in its discretion any application for the issue,
subject to detailed terms and conditions available upon sale, redemption, cancellation or switch of Shares or
request. require the mandatory redemption of Shares or transfer of
Shares to a person qualified to hold them.
20.3 Client account
20.7.2 The distribution of this prospectus and the offering of
Cash may be held for investors in a client account in certain Shares in or to persons resident in or nationals of or
circumstances. Interest is not paid on any such balances. citizens of jurisdictions outside the UK or who are
nominees of, custodians or trustees for, citizens or
20.4 ACD dealing as principal
nationals of other countries may be affected by the laws of
Where the ACD deals as principal in the Shares of the Company, the relevant jurisdictions. Such Shareholders should
any profits or losses arising from such transactions will accrue to inform themselves about and observe any applicable legal
the ACD and not to the Company. The ACD is under no obligation requirements. It is the responsibility of any Shareholder to
to account to the Depositary, or to Shareholders for any profit it satisfy himself as to the full observance of the laws and
makes on the issue or reissue of Shares or cancellation of Shares regulatory requirements of the relevant jurisdiction,
which it has redeemed. including obtaining any governmental, exchange control or
other consents which may be required, or compliance with
20.5 Stamp duty reserve tax (‘SDRT’) other necessary formalities needing to be observed and
20.5.1 The stamp duty reserve tax (SDRT) charge on UK unit payment of any issue, transfer or other taxes or duties due
trusts and open-ended investment companies (OEICs) has in such jurisdiction. Any such Shareholder will be
been abolished with effect from 30 March 2014. A principal responsible for any such issue, transfer or other taxes or
SDRT charge of 0.5% has been retained to be made on payments by whomsoever payable and the Company (and
the value of non-pro rata in specie redemptions. This is a any person acting on behalf of it) shall be fully indemnified
and held harmless by such Shareholder for any such issue,
PAIF/210214/ENG/r02 11Prospectus
M&G Property Portfolio
transfer or other taxes or duties as the Company (and any 20.8.3 The ACD may take these steps at any time, without any
person acting on behalf of it) may be required to pay. obligation to provide prior notice and without any liability for
any consequence that may arise.
20.7.3 If it comes to the notice of the ACD that any Shares
(“affected Shares”) are owned directly or beneficially in 20.8.4 Inappropriate or excessive trading can sometimes be
breach of any law or governmental regulation (or any difficult to detect particularly where transactions are placed
interpretation of a law or regulation by a competent via a nominee account. The ACD therefore cannot
authority) of any country or territory, which would (or would guarantee that its efforts will be successful in eliminating
if other Shares were acquired or held in like circumstances) such activities and their detrimental effects.
result in the Company incurring any liability to taxation
which the Company would not be able to recoup itself or 21 Suspension of dealings in the Company
suffering any other adverse consequence (including a
requirement to register under any securities or investment 21.1 The ACD may with the agreement of the Depositary, or must if the
or similar laws or governmental regulations of any country Depositary so requires, temporarily suspend for a period the issue,
or territory) or by virtue of which the Shareholder or sale, cancellation and redemption of Shares or any Class of Shares
Shareholders in question is/are not qualified to hold such in the Company if the ACD or the Depositary is of the opinion that
Shares or if it reasonably believes this to be the case, the due to exceptional circumstances there is good and sufficient
ACD may give notice to the Shareholder(s) of the affected reason to do so having regard to the interests of Shareholders.
Shares requiring the transfer of such Shares to a person 21.2 The ACD will notify Shareholders as soon as is practicable after the
who is qualified or entitled to own them or that a request in commencement of the suspension, including details of the
writing be given for the redemption of such Shares. If any exceptional circumstances which have led to the suspension, in a
Shareholder upon whom such a notice is served does not clear, fair and not misleading way and giving Shareholders details
within thirty days after the date of such notice transfer their of how to find further information about the suspensions.
affected Shares to a person qualified to own them or
submit a written request for their redemption to the ACD or 21.3 Where such suspension takes place, the ACD will publish, on its
establish to the satisfaction of the ACD (whose judgement website or other general means, sufficient details to keep
is final and binding) that they or the beneficial owner are Shareholders appropriately informed about the suspension,
qualified and entitled to own the affected Shares, they shall including, if known, its possible duration.
be deemed upon the expiration of that thirty day period to
21.4 During the suspension none of the obligations in COLL 6.2
have given a request in writing for the redemption or
(Dealing) will apply but the ACD will comply with as much of COLL
cancellation (at the discretion of the ACD) of all the
6.3 (Valuation and Pricing) during the period of suspension as is
affected Shares pursuant to the Regulations.
practicable in light of the suspension.
20.7.4 A Shareholder who becomes aware that they are holding
21.5 Re-calculation of the Share price for the purpose of sales and
or own affected Shares shall forthwith, unless they have
purchases will commence at the time the suspension is ended or at
already received a notice as aforesaid, either transfer all
the next relevant valuation point following the ending of the
their affected Shares to a person qualified to own them or
suspension.
submit a request in writing to the ACD for the redemption
of all their affected Shares. 21.6 The exceptional circumstances in which the Manager or the Trustee
may require the temporary suspension of the issue, sale,
20.7.5 Where a request in writing is given or deemed to be given
cancellation and redemption of Shares, or any class of Shares in
for the redemption of affected Shares, such redemption will
the Fund include, but are not limited to the following:
be effected in the same manner as provided for under the
Regulations, if effected at all. 21.6.1 during any period when, in the opinion of the Manager or
the Trustee, an accurate valuation of the Fund cannot
20.8 Excessive Trading
occur, including:
20.8.1 The ACD generally encourages Shareholders to invest in
21.6.1.1 where one or more markets is unexpectedly
the Company as part of a long-term investment strategy
closed or where dealing is suspended or
and discourages excessive, short term, or abusive trading
restricted;
practices. Such activities may have a detrimental effect on
the Company and other Shareholders. The ACD has 21.6.1.2 during a political, economic, military or
several powers to help ensure that Shareholder interests other emergency; or
are protected from such practices. These include:
21.6.1.3 during any breakdown in the means of
20.8.1.1 refusing an application for Shares (see communication or computation normally
paragraph 16.1.3); employed in determining the price or value
of any of the investments of the Fund or
20.8.1.2 fair value pricing (see paragraph 25); and,
any Classes of Shares;
20.8.1.3 the pricing policy (see paragraph 26).
21.6.2 upon the decision of the Manager, having given sufficient
20.8.2 The ACD monitors shareholder dealing activity and if it notice to Shareholders, to wind up the Fund.
identifies any behaviour that, in its view, constitutes
inappropriate or excessive trading, the ACD may take any 22 Money laundering
of the following steps with the Shareholders it believes are
responsible: As a result of legislation in force in the United Kingdom to prevent
money laundering, firms conducting investment business are
20.8.2.1 issue warnings which if ignored may lead to responsible for compliance with money laundering regulations. The
further applications for Shares being ACD may verify your identity electronically when you undertake
refused; certain transactions. In certain circumstances investors may be
asked to provide proof of identity when buying or selling Shares.
20.8.2.2 restrict methods of dealing available to
Normally this will not result in any delay in carrying out instructions
particular Shareholders; and/or,
but, should the ACD request additional information, this may mean
20.8.2.3 impose a switching fee (see paragraph that instructions will not be carried out until the information is
19.3). received. In these circumstances, the ACD may refuse to sell or,
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