The investment management arm of parent company Legal & General said its index business had seen sustained strong new business flows and its change in focus towards globally diversified products had led to gross fixed income inflows of £4.6bn, albeit with £4.2bn of the growth coming from market movements.
Total AUM in fixed income products were £72.4bn at the end of 2011, up from £66.6bn at the start of the year. The equities side of the business fared less well, with AUM down to £7.2bn by the 31 December, from £9.1bn on the 1 January, while property AUM saw a small increase in the year from £8.5bn to £9bn.
The firm also said it had extended its marketing and distribution capability in order to promote internationally, particularly to clients in North America, the Gulf and Asia.
It said despite the challenging market it had delivered a 14% increase in operating profit to £234m, compared to £206m in 2010.
LGIM said inflows were particularly strong across its higher fee generating assets, with increased demand for its de-risking capabilities such as currency hedging, dynamic asset allocation and transition management helping to drive strong revenues.
The number of international clients has also increased, with international AUM up by 30% to £18.3bn, with gross new business of £6.5bn over the year. The firm is planning entry into the Asian market in 2012.
Parent company L&G reflected its confidence in its overall results with a 35% hike to its dividend, up to 6.4p per share, with £150m of the dividend coming from LGIM, compared to £132m a year earlier.
