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 £1bn (and potentially up to £1.5bn) 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.