Fund groups lobby government to close Aviva preference share loophole

Letter to economic secretary John Glen

A group of asset managers, including M&G Prudential, BlackRock and Invesco, have called on the government to close a legal loophole, which would have allowed insurance giant Aviva to redeem £450m of high-yielding preference shares without paying a premium.

Investor pressure in March forced Aviva to back down on the plans, which were driven by legal advice owing to regulatory requirements and would have seen the preference shares no longer count as regulatory capital in 2026. In a letter to economic secretary John Glen, asset management groups M&G Prudential, Invesco, GAM, Blackrock, Edentree and Legal & General, representing a combined 29% stake in Aviva, demanded the Companies Act be changed to end uncertainty over the preference shares in circulation, according to The Times.  The letter, signed by M&G's head of corporate finance and s...