M&G Prudential has gone “full circle” as it announced its intention to list its shares under the name M&G when it demerges from Prudential later this year.
The asset manager said as an independent company M&G will have a single corporate identity and will continue with two customer-facing brands. These will include Prudential for savings and insurance customers in the UK and Europe and for asset management in South Africa and M&G Investments for asset management clients globally.
M&G Prudential chief executive John Foley (pictured) said shares would list under the M&G name in Q4, ahead of which a new corporate identity would be announced.
Foley said: “We are in the fortunate position of having two strong brands, each with a rich heritage. But as an international business operating in 28 markets, we need a single corporate name we can use globally.
M&G’s reach has extended dramatically
GBI2 managing director Graham Bentley said the group has “gone full circle”. “M&G was a listed company for many years. I was at M&G when Pru paid £1.9bn for it in 1999.
“Pru has a weak brand as an investment manager per se, while M&G’s reach has extended dramatically over 20 years – see all their ads at French alpine ski resorts. I suspect the Pru brand will be kept for insurance products, despite the name change.”
Chelsea Financial Services managing director Darius McDermott reckoned the branding looked “sensible”. “Given the demerger from the Prudential group, M&G is the obvious brand to go with.”
M&G profits fall
In a separate update from Prudential, net outflows hit average funds managed by M&G in H1, which fell to £263.8bn from £285.3bn. Operating profit fell 12% to £239m.
Interactive Investor head of markets Richard Hunter said the smaller UK and European business is “hostage to the current state of economic unease and there are signals that this part of the group is under some pressure”.
“In addition, demerger costs are estimated to potentially run as high as £355m, while in general terms, a prolonged period of market weakness and/or volatility would tighten the financial screw.” However, he said the rationale and benefits of the demerger are crystal clear when “considering the potential of what will be the larger of the two entities after the split in the form of Prudential”.
Hunter said in terms of sheer size and potential, Prudential is likely to “rule the roost post-demerger”, with the M&G business looking to define a growth path nearer to home.
He added: “It will be interesting to see whether these rather different businesses will attract a similar – and positive – investor following. For the moment, as a combined entity and with the areas of expansive growth visible, the market consensus of the shares stands at a strong buy, notwithstanding a disappointing recent share price performance.”
