Legal & General IM grows assets with Gulf, US flows
Legal & General Investment Management (LGIM) delivered strong results in 2012, with net inflows of £7.1bn (2011: £3.0bn) helping drive revenues to £446m (2011: £417m) and operating profit to £243m (2011: £234m).
Assets under management grew by 9% to £406bn (2011: £371bn).
New business inflows and outstanding client retention continue to contribute to steadily increasing profits. The growth of LGIM’s international business accelerated during the year, especially in the US and the Gulf, a statement said.
Net inflows from international clients rose to £7.8bn (2011: £4.5bn) and international assets under management increased by 34% to £43bn (2011: £32bn).
LGIM said its defined contribution proposition is gathering momentum. The launch of new funds together with the first phase of so-called auto-enrolment into UK pension schemes has contributed to a healthy rate of growth. Defined contribution assets were up by 19% to £25.4bn (2011: £21.3bn).
Client demand for LGIM’s active fixed income products also grew, fuelled by consistently strong fund performance across the majority of funds. Net active fixed income inflows increased by 25% to £2.0bn (2011: £1.6bn) and assets under management grew to £82bn (2011: £72bn).
LGIM’s Liability Driven Investment (LDI) business also enjoyed a successful year. Over the last five years, the business has grown rapidly with LDI assets under management more than doubling to £64bn (2011: £58bn), as an increasing number of pension schemes in the UK and the US look to de-risk.
The index business delivered positive net flows of £2.8bn and assets under management ended the year at £243bn. The index business remains a core part of LGIM’s business model, accounting for around 60% of LGIM’s total assets under management.
Mark Zinkula, LGIM chief executive officer, said: “Our international business has shown tremendous growth over the year. In the US, we are very well placed to capitalise on the de-risking trend due to our growing reputation as a thought leader in LDI and the strength of our fixed income team.”
“We have extended our distribution capabilities in the Gulf and Europe and as a result are seeing increasing interest in our index, active fixed income and property funds. Overall, we continue to see strong demand for our LDI and fixed income capabilities alongside our market-leading index tracking business.”