LGIM posts 20% rise in AUM

Legal & General Investment Management (LGIM) has posted a 20% rise in AUM to £894.2bn as it remains committed to low-fee investing against continued pressure from industry forces.

LGIM posts 20% rise in AUM


Sitting within the broader Legal & General group annual results to 31 December 2016, which saw the group report a 7% rise in its annual dividend, from 13.40p per share to 14.35p per share for the full year.

In its statement, the group said: “LGIM is targeting further outperformance of market net fund flows.

“The business will maintain a client-focused, low-cost fee model, however, we anticipate further fee pressure in the asset management industry.

“We will continue our investment in technology, client propositions and overseas distribution to maintain momentum in net flows.”

LGIM’s UK retail business experienced net inflows of £1.4bn, placing it third-highest of its peer group, accordind to the 2015 Pridham Report, despite “challenging retail market conditions”. 

The group expects to continue to gain further market share through the rise of de-risking strategies in defined benefit (DB) pension schemes.

As well as focusing on accelerating its US business, group chief executive Nigel Wilson said: “We believe the UK remains a great place for us to help fill the huge funding gaps and under-provision of key financial products.

“We are playing our part to regenerate the UK’s cities, delivering economic growth and jobs, capitalise on its world-leading universities and improve commercialisation of its scientific discoveries.”

At group level, L&G reported an 11% rise in adjusted operating profits from £1.46bn to £1.63bn.

Following the sale of Cofunds and IPS to Aegon on 1 January – for £147.5m – the group conceded a loss of £64m but said no further costs to the business were expected.

The business said it was cognisant of innovative, digital solutions able to disrupt the current competitive landscape as well as overseas entrants.

It said: “We are executing a digital strategy, using platforms that allow for growth and high scale.

“Alongside our direct insurance business that enable customers to purchase our protection products online, we continue to enhance our online capabilities for autoenrolment, investment platforms and individual retirement products ensuring focus on customer engagement and the digital experience.”