M&G shares: Growing fed up with the fund manager’s parsimony? See what this leading bank has to say


Are investors growing fed up with M&G PLC (LSE:MNG), which is sitting on a cash pile but doesn’t seem to have any plans to redistribute or use it?

The shares are down around 12% since its interim results earlier this month, which may be indicative of the sentiment around the fund manager.

Certainly, the financials team at Deutsche Bank (NYSE:DB) has detected some frustration.

“Whilst some of this will be down to continuing weakness in the asset management business (particularly in PruFund), we suspect a lot is also down to frustration that an apparently strong solvency ratio and strong capital generation target don’t at this stage translate into a more proactive stance on deployment of excess capital,” it said in a note to clients.

“Specifically, although we believe excess cash could build to around GBP1bn (and potentially up to GBP1.5bn) over the course of 2022, we don’t believe management is likely to release any of this before mid-2022 or possibly even early 2023.”

Deutsche said that with no near-term catalysts in sight it is sticking with its ‘hold’ recommendation, though it has nudged down its price target by 5p a share to 220p.


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