LGIM profits and AUM slide as rate hikes take a toll

The firm reported operating profit of £142m for the first half

Nigel Wilson
Nigel Wilson


Legal & General Investment Management has reported operating profit of £142m for the first half of the year, down 29% from £200m in the first half of 2022.

The firm said this was primarily driven by a £132bn fall in assets under management to £1.2tn, which it attributed to the impact of interest rates rises.

Revenue for the asset management business fell to £435m from £485m in the corresponding period a year ago. 

In the accompanying commentary, LGIM stated that 2022 was a ‘profoundly challenging year’ for all asset managers. It noted that while there has been a partial recovery in global equity markets in the first half of 2023, this has been offset by further rises in interest rates.

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In terms of strategy going forward, LGIM said it is adding to its investment offering, with the focus on ‘higher-margin areas’ such as private markets and active fixed income. 

Parent company Legal & General Group recorded £941m in operating profit for the half year, versus £958m in the first half of 2022. 

The firm confirmed incoming CEO António Simões will take up his position on 1 January 2024, replacing the departing Nigel Wilson. 

Adam Vettese, analyst at eToro, commented: “While Legal & General was less profitable in the first half of its fiscal year than it was a year ago, it has smashed analysts’ expectations. 

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“Operating profit came in more than £100m above consensus, while the insurance giant’s solvency II ratio also ended up well above expectations, meaning it is better capitalised against market shocks. 

“The firm is also making progress on its five-year plan, which is to grow dividends by 5% a year to 2024 and to ensure cash and capital generation exceed dividend payouts.”

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