One of the UK largest fund managers has ditched support for troubled doorstep lender Provident Financial.
M&G, listed as one of Provident's top five biggest backers at the end of July, has dumped shares in the Bradford-based lender and is no longer one of the firm's largest shareholders.
Asset managers Invesco, Woodford, Blackrock and Marathon are holding firm in support of the lender. Meanwhile, Jupiter has upped its stake and passed the four per cent threshold.
It is understood M&G's sale of shares was driven by Provident's decision to cancel its dividend and the impact on the some of the fund manager's income generating funds.
The large shareholder changes come ahead of Provident formally falling out of the blue chip index on Friday. This will likely see the investor base rejigged again as fund managers with FTSE 100 funds sell out of relegated stocks.
Provident Financial's share price fell by two-thirds on 22 August, the biggest one-day sell-off of a FTSE 100 firm this decade. The fall was prompted by a catalogue of problems emanating in its consumer credit division.
Star fund manager Neil Woodford, whose firm owns almost 20 per cent of Provident, remained defiant of his stock selection despite the troubles facing Provident. He has subsequently apologised for his fund's recent poor performance.
Woodford is a favourite for retail investors on the hunt for income investors. His equity income boasts net assets of nearly £10bn according to Hargreaves Lansdown.
Invesco, Woodford's former employer, also owns around a fifth of the lender's shares.
M&G declined to comment.
|As at 27 July 2017||Percentage shareholding|
|Woodford Investment Management||19.90%|
|Marathon Asset Management||4.69%|
|M&G Investment Management||4.53%|
|As at 4 September 2017||Percentage shareholding|
|Woodford Investment Management||19.42%|
|Marathon Asset Management||4.65%|
|Jupiter Asset Management||4.21%|