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M&G sees demutual trend

M&G predicts that demutualisation will become a global trend, propelling thousands of investors into the equity market for the first time.

The claim follows the ongoing demutualisations of Friends Provident and National Mutual in the UK and US life insurer Phoenix, which floated for $1.65bn (£1.17bn) this week.

M&G says in recent years demutualisations such as Halifax and Woolwich gave investors their first foot in equities. M&G believes that the quoted status of demutualised companies has a substantial impact on their future developments, leaving them open to potential large-scale mergers for the first time. It cites Halifax&#39s recent merger with the Bank of Scotland and the Woolwich&#39s move to join the Barclays group.

M&G Global Financials fund manager David Jane says: “Demutualisation has spurred the managements of these companies to offer better services to customers and improve returns to shareholders.”

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