Legal & General Investment Management’s push into markets outside the UK has begun to pay dividends, with inflows into the business up 70% in 2021.
Demand from international clients was the driving force behind the fund group’s bumper flows, accounting for 85% of its £34.6bn worth of net new business. External flows were up markedly from £20.4bn in 2020 but still less than the £86.4bn raked in over 2019, though £37bn of this was down to a single mandate with the Japan Government Pension Investment fund.
This pushed assets under management up 11% to £1.4trn and saw revenues surpass £1bn for the first time.
International assets account for a third of £1.4trn AUM
Expanding its presence in Asia, Europe and the US is a key part of LGIM’s goal to improve cumulative profitability by 3-6%. Last year, operating profits rose 4% to £422m.
Its international AUM has more than doubled over five years and currently stands at £479bn or 34% of total assets.
European investors were responsible for the bulk of its international flows last year, with clients adding £13.6bn, taking AUM to €100bn.
But it also had decent traction in Japan, reporting £7.4bn of net flows compared to £6.5bn for the rest of Asia. LGIM is now the eighth largest asset manager in the country.
In the US, net inflows hit £4.5bn, while its international ETF business brought in £2.5bn.
The fund group has also been focusing on attracting flows into higher margin areas such as thematic ETFs, multi-asset and real Assets. Its growth in the former has been particularly noteworthy, fuelling a 50% increase in ETF AUM in 2021 to $13.7bn.
In total index strategies took in £3.9bn of net flows last year but this was well behind its multi-asset business which took in £7.2bn of client cash.
However, its Solutions business garnered the highest level of inflows at £18.4bn, bringing its total assets to £605.1bn.
