M&G PLC (MNG)

[Dod101]

I commented on the HYP MNG post that I was thinking of selling my PRU holding and transferring it into MNG, as the PRU is now yielding less than 2% with the divi cut. The one worry about doing that is that I'd be moving from a company that is focussing on the quickly growing Asian and African markets and focusing further on the UK.

I do not hold either the Pru or M & G and have no interest in either but I do not think I would be moving out of Pru into M & G. You have identified at least one problem which is that M & G is very UK focused and there are better fund managers around in that market. Secondly, Pru is now almost entirely Asia based which is surely where you want to be invested. Chasing yield, especially UK based yield, is never a very good idea.

Dod

[Tara]

https://www.investegate.co.uk/m--38-g-p ... 00055579R/

Good results from M&G. Increased dividend and a yield over 8%.

[vrdiver]

https://www.investegate.co.uk/m--38-g-plc--mng-/rns/m-g-plc-full-year-2020-results/202103090700055579R/

Good results from M&G. Increased dividend and a yield over 8%.

I was confused, as I have last year's interim dividend down as 15.77p, and this year's is "increased" to 12.23p. On closer reading, last year's turns out to be made up of an ordinary dividend of 11.92p alongside a special "demerger" dividend of 3.85p.

So the ordinary is up, but the total to be paid is down. Mr Market seems to like it, so I guess I should too.

VRD

[Tara]

https://www.investegate.co.uk/m--38-g-plc--mng-/rns/m-g-plc-full-year-2020-results/202103090700055579R/

Good results from M&G. Increased dividend and a yield over 8%.

I was confused, as I have last year's interim dividend down as 15.77p, and this year's is "increased" to 12.23p. On closer reading, last year's turns out to be made up of an ordinary dividend of 11.92p alongside a special "demerger" dividend of 3.85p.

So the ordinary is up, but the total to be paid is down. Mr Market seems to like it, so I guess I should too.

VRD

The dividend last year was 11.92p. There was also a special dividend of 3.85p.

You also have to include the interim dividend of 6p. The total dividend for last year was therefore 21.77p.

Assuming there are no special dividends this year, the total dividend should be 6p + 12.23p = 18.23p.

This gives a yield over 8%.

[scrumpyjack]

They are obviously very lowly rated and one can see why. They consist of two businesses, asset management and run off annuities. They are getting rid of the latter to Rothesay which releases lots of capital leaving just the asset management business.

The trouble is that whilst annuity run off is boring, needs capital and is not very high margin, it is theirs 'for life' (literally) and so is very low risk and steady.

Asset management is fine, as long as the performance of the funds you manage for clients is good and you manage to get more AUM as a result.
But if your funds do not perform well, clients will quickly take their money elsewhere and you don't have a business. That is what is happening to Standard Life who halved their dividend today. M&G is not a Lindsell Train or a Fundsmith so you need to bear this in mind. IMO a 9% yield looks very nice, but it could evaporate quickly.

I still have mine from the Pru demerger but will think about getting out at some point, but I've never been good at timing my sells!

Ideally one hangs on until they hand back all the cash realised by the sale to Rothesay and then get out before they demonstrate that they are not top notch at asset management!

[absolutezero]

They are obviously very lowly rated and one can see why. They consist of two businesses, asset management and run off annuities. They are getting rid of the latter to Rothesay which releases lots of capital leaving just the asset management business.

The trouble is that whilst annuity run off is boring, needs capital and is not very high margin, it is theirs 'for life' (literally) and so is very low risk and steady.

Asset management is fine, as long as the performance of the funds you manage for clients is good and you manage to get more AUM as a result.
But if your funds do not perform well, clients will quickly take their money elsewhere and you don't have a business. That is what is happening to Standard Life who halved their dividend today. M&G is not a Lindsell Train or a Fundsmith so you need to bear this in mind. IMO a 9% yield looks very nice, but it could evaporate quickly.

I still have mine from the Pru demerger but will think about getting out at some point, but I've never been good at timing my sells!

Ideally one hangs on until they hand back all the cash realised by the sale to Rothesay and then get out before they demonstrate that they are not top notch at asset management!

Correct. I am not in a rush to sell M&G shares, but they don't have a single investment in house that I would buy. Mind you, neither do Schroders and I hold their shares too.

RVF

Stating the obvious, but it's not about what you would buy. It's about what other people will buy.
I don't drink, but I own Diageo.

[scrumpyjack]

I thought that is exactly what I was saying! If people stop buying the funds, M&G will not be good investment, as has happened with SL.
It is nothing to do with whether I like the funds (or Guinness). Don't like either as it happens.

The only way they can lose the annuitants as customers is through them snuffing it!

[Dod101]

I happen to hold two bonds funds run by M & G and one run by Schroders but that is totally irrelevant. Schroders has got a great pedigree, a recognised and successful worldwide brand and a very large family shareholding. These are all positives to me.

M & G is the rump of a successful outfit, newly floated into a not very sympathetic world. One business they are about to sell and another an unknown quality which may come good but who knows? The current high yield reflects that uncertainty I think. So you make your choice.

Dod

[scrumpyjack]

Also worth noting that Pru got rid of it because it was not a business they wanted to be in for the long term.
It may all turn out well, who knows

[absolutezero]

How long before all the other people start thinking like me and no longer buy the funds?

RVF

How long before enough think like me and stop buying booze?

[Padders72]

How long before all the other people start thinking like me and no longer buy the funds?

RVF

How long before enough think like me and stop buying booze?

I wouldn't hold your breath.

[absolutezero]

How long before all the other people start thinking like me and no longer buy the funds?

RVF

How long before enough think like me and stop buying booze?

I wouldn't hold your breath.

I wouldn't advise you to either. You would die.

Back to the M&G thing. Doesn't matter what you or I think about their product.
What matters is what the masses think of it. For now, they appear to be buying their funds.
If that changes, then flog the share. For now it looks good.

[idpickering]

M&G plc half year 2021 results

https://www.investegate.co.uk/m--38-g-p ... 00040756I/

[88V8]

The Rothesay transfer which was previously blocked by the High Court, has now been allowed.

The original HC ruling was referred back by the Court of Appeal in December In what is a significant decision for the insurance sector the Court of Appeal has overturned the High Court’s refusal to sanction the transfer of a portfolio of annuity policies from Prudential Assurance Company Ltd (“Prudential”) to Rothesay Life Plc (“Rothesay”) under Part VII of the Financial Services and Markets Act 2000 (“Part VII”).
The Court of Appeal found that the High Court judge exercised his discretion incorrectly, finding amongst other things, that the judge was wrong to give weight to (i) the different capital management policies of Prudential and Rothesay; and (ii) the objections of a small subset of policyholders. The decision is good news and will be welcomed by those involved in Part VII schemes.
https://www.dlapiper.com/en/uk/insights/publications/2020/12/green-light-for-prudential-and-rothesay-transfer/

The new HC ruling last week means that the transfer can go ahead. https://www.euronews.com/next/2021/11/24/rothesay-m-g-annuities
Not that it's done M&G's SP much good. Down over 20% since it seemed a good idea to buy some.
Don't chase the yield!!

The other leading Zombie funds, Phoenix and in particular their smaller peer Chesnara, should benefit from the HC ruling, although again that is not yet visible in their SP.

V8

[Dod101]

The Rothesay transfer which was previously blocked by the High Court, has now been allowed.

The original HC ruling was referred back by the Court of Appeal in December In what is a significant decision for the insurance sector the Court of Appeal has overturned the High Court’s refusal to sanction the transfer of a portfolio of annuity policies from Prudential Assurance Company Ltd (“Prudential”) to Rothesay Life Plc (“Rothesay”) under Part VII of the Financial Services and Markets Act 2000 (“Part VII”).
The Court of Appeal found that the High Court judge exercised his discretion incorrectly, finding amongst other things, that the judge was wrong to give weight to (i) the different capital management policies of Prudential and Rothesay; and (ii) the objections of a small subset of policyholders. The decision is good news and will be welcomed by those involved in Part VII schemes.
https://www.dlapiper.com/en/uk/insights/publications/2020/12/green-light-for-prudential-and-rothesay-transfer/

The new HC ruling last week means that the transfer can go ahead. https://www.euronews.com/next/2021/11/24/rothesay-m-g-annuities
Not that it's done M&G's SP much good. Down over 20% since it seemed a good idea to buy some.
Don't chase the yield!!

The other leading Zombie funds, Phoenix and in particular their smaller peer Chesnara, should benefit from the HC ruling, although again that is not yet visible in their SP.

V8

Actually I do not think that it will have the slightest effect on Phoenix as it is now a very large insurer. Chesnara is smaller but I do not know if they have lost any business on that account.

As for M & G, what has it got that say Legal & General has not got, apart from a much higher yield? Often high yields are for a reason and M & G has no independent track record.

Dod

[daveh]

M&G gets a new CFO

https://www.investegate.co.uk/m--38-g-p ... 00016537Y/

M&G plc, the international savings and investments business, today announces the appointment of Kathryn McLeland as Chief Financial Officer.

Kathryn joins from Barclays PLC, where she has been Group Treasurer since 2018, with responsibilities that included capital management and strategy, principal equity investments (including sustainable impact and Fin Tech) and investor relations.

[idpickering]

M&G in digital wealth partnership with Moneyfarm

M&G plc announces today that it is partnering with Moneyfarm, a leading digital investment specialist, to provide direct investment services to UK consumers. M&G Wealth, the company's UK wealth management arm, will use Moneyfarm's existing technology, digital capabilities and investment guidance journeys to back its own branded proposition.

Direct investing in the UK has seen rapid growth in the last five years, with an average annual increase in assets under management of 18% to reach £351bn by the end of June 20211. Within this sector, demand for digital investment services has accelerated, and now accounts for 19% of all UK direct customers1. Moneyfarm is considered one of the pioneering providers of this emerging segment of the market, offering a modern approach to investing through its proven digital platform technology and marketing expertise.

Designed by M&G Wealth, this new direct digital service will be tailored to meet a range of customer risk appetites and profiles through a collection of multi-asset model portfolios, backed by a selection of actively-managed and passive funds.

Moneyfarm will deliver the operating models, including dedicated squads to support the technology platform and customer relationship management, together with custody and trading services.

Separately, M&G plc is to invest a minority stake in MFM Holding Ltd as part of the company's latest round of fundraising. Together M&G and Moneyfarm will also explore a range of other opportunities to partner in other European wealth markets.

https://www.investegate.co.uk/m--38-g-p ... 00056234Z/

[daveh]

Acquires responsAbility investments

https://www.investegate.co.uk/m--38-g-p ... 00108243Z/

M&G plc ("M&G"), the international savings and investments business, today announces that it has agreed to acquire a majority stake in responsAbility Investments AG ("responsAbility"), a leader in impact investing focused on private debt and private equity across emerging markets.

[88V8]

M&G's PE is <5, their divi covered more than twice.
If they establish a solid track record they will have been a good buy for me.
But it is a leap of faith buying in at this stage.

V8

[BullDog]

M&G's PE is <5, their divi covered more than twice.
If they establish a solid track record they will have been a good buy for me.
But it is a leap of faith buying in at this stage.

V8

I continually worry about what it is that I don't know here. I bought in at a lower price, locking in above a 10% yield. It seems you may have similar doubts at the back of your mind. Just wait and see. MNG is perhaps one of those shares that despite being good to me, I am never quite comfortable with.