M&G Asset Management is considering purchasing a number of boutique firms, according to CEO Joseph Pinto.
It reported fund inflows of £1.5bn for 2023 in its latest annual report published last week, and Pinto said the firm wants to continue building momentum by expanding its services.
“Moving forward, we want to keep growing our franchises, especially in private markets,” he said. “We are looking at recruiting new investment teams by eventually buying small boutiques to integrate.
“We are gifted enough to have the M&G life insurance branch as a partner, which is very keen to invest in private markets as well.”
Pinto hopes that launching new products with exposure to private assets will appeal to institutional clients in the UK, who withdrew £6.2bn from M&G last year.
This was triggered by the mini-budget crisis in 2022 and exacerbated by the ongoing de-risking of Defined Benefit pension funds.
These schemes are increasingly moving away from active equity products and instead seeking private assets, which gives M&G an opportunity to meet that demand, according to Pinto.
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“They have a cap on fees, so they tend to buy passive products as far as public markets are concerned because they are much cheaper and give them more space in respect to fees,” he said.
The firm appointed Emmanuel Deblanc as CIO of private markets at the end of January to oversee this plan, but M&G is also looking to create new funds specialising in other areas too.
“We have to take a different strategy here,” Pinto said. “To help the de-risking of DC pensions, we are providing fixed income products to them and we are deploying those strategies as we speak.
“We have several products in the market already that are up and running, and we want to keep adding new strategies in those aisles for the UK, European and Asian market.
“We are launching new strategies in the UK, including for the DC segments, on top of which we are looking at new investment teams, either by buying boutiques or integrating teams, so we are currently reviewing a number of those initiatives and ideas.”
Acquisitions are nothing new to M&G. The wealth branch of the business has made several purchases in recent years, including that of Sandringham Financial Partners in 2022 and Continuum last year.
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