Legal & General Investment Management’s assets under management jumped 9% in the first half of the year driven by strong flows into its pension businesses.
AUM stood at £1.2trn at the end of June, up 4% from £1.1trn at the end of June 2019.
External net flows were £6.2bn compared with £60.3bn in H1 2019, representing 0.5% of opening external AUM. LGIM said this was driven by strong net flows of £8bn into the UK defined benefit (DB) and defined contribution (DC) pensions businesses. The UK DC business took on £5.5bn over the period while the DB business added £2.5bn.
UK retail saw a net flow of £1.2bn and £200m of inflows were recorded as ‘other’. The international business recorded a net outflow of £3.2bn.
It added £38bn due to markets and other movements between end of June 2019 and end of June 2020, it said.
Total operating profit was up 2% to £196m for the period, compared with £192m in 2019. It recorded a cost to income ratio of 58%, up from 55% the year before which it said reflected the firm’s “continued investment in areas to drive future growth and where increased automation and simplification will generate operational leverage”.
Total revenue was up 8% to £467m and management fees increased by 8% to £458m.
Buried in the results was the announcement of the launch of the LGIM Secure Income Assets fund aimed at pension funds and other institutional investors. It said the fund would offer stable, long-term cashflows from exposure to infrastructure debt, real estate debt and private corporate debt, with co-investment from its Legal & General Retirement business.
LGIM chief executive Michelle Scrimgeour (pictured) said: “LGIM has shown resilience amidst the significant market volatility and the exceptional business context associated with Covid-19 globally. The business has continued to deliver positive external net flows in the first half of 2020 and has grown AUM, demonstrating the benefits of a diversified asset base and the strong structural demand for our products and capabilities.”
