Key facts
- M&G reported a £165 million loss for the first half of the year.
- A £325 million write-down on UK ground rent assets impacted the company's bottom line.
- The write-down is attributed to the government's cap on existing ground rents.
- M&G's core operating profit, excluding the write-down, rose 15% to £435 million.
- The asset manager holds approximately £722 million in UK ground rent assets.
Asset manager M&G has reported a £165 million loss for the first six months of the year, largely due to a £325 million write-down on its UK ground rent assets. This write-down was necessitated by the Labour government's introduction of a cap on existing ground rents, limiting the cash flows from these assets.
Despite the headline loss, M&G's core operating profit, which excludes the write-down, saw a 15% increase to £435 million. The company has been vocal in its criticism of the government's policy, with CEO Andrea Rossi stating that the solution is 'disproportionate' and could negatively impact savers and the UK's reputation as an investment location. M&G had advocated for a more flexible cap tied to initial lease amounts with inflation adjustments.
Separately, M&G reported a rise in total assets under management to £387.4 billion and net inflows of £2.4 billion, indicating underlying strength in its broader business operations. Rossi expressed confidence that M&G is well-positioned to manage the impacts of the new legislation.