Legal & General Investment Management delivers consistent growth in 2018

6 mrt 2019

Legal & General Investment Management (LGIM) today announced that it has surpassed £1tn in assets under management (AUM), following another strong year of growth in 2018 and despite a volatile market backdrop. LGIM had external net inflows of £42.6bn, driving a 3% increase in total AUM to £1,015bn (2017: £983bn).

LGIM has continued to focus on gradually expanding its international presence, extending its investment capabilities as well as making several senior hires in Europe, the Middle East and Asia. International assets grew by 13% to £258bn in 2018, up from £228bn in 2017, a trend LGIM expects to continue as it successfully embeds the business in international markets. In the US, LGIM saw net inflows of $15.2bn, £6.8bn in the Gulf and £3.0bn in Asia.

Mark Zinkula, CEO of LGIM, commented, “2018 was a pivotal year for the business, surpassing £1tn in assets under management and building on the momentum of recent years in which we have delivered consistent growth. International expansion has been a strategic priority and we have made significant investments and key hires to ensure we have the right platform for long-term growth in all of our key markets.

“2018 was a challenging year for asset managers globally. The results announced today reflect the confidence our clients hold in us to help navigate these uncertain markets and deliver on their overall investment objectives.”

Continued UK growth

The defined contribution (DC) business continued to grow rapidly, with total net inflows of £8.4bn (2017: £3.0bn) and an 18% increase in total UK DC AUM to £70.8bn (2017: £60.1bn). LGIM has experienced a 19% increase in customers on LGIM’s Workplace pension platform, with the number of members now at 3.1m (2017: 2.7m). The UK Master trusts recently surpassed £5.5bn in assets under management, reflecting the continued appeal of the structure for DC schemes wishing to outsource their governance, investment and administration.

The retail business saw net inflows of £2.8bn (2017: £3.0bn) with AUM increasing to £25.5bn (2017: £24.2bn), following growing demand for multi-asset and index products. The business was ranked second in both gross and net UK retail sales in 2018 (Pridham report), a significant achievement in volatile markets. The acquisition of Canvas completed in March 2018, with the European ETF platform now fully integrated. Total AUM for the ETF business is £2.3bn.

LGIM’s personal investing business, launched in 2017, currently has AUM of £5.1bn (2017 £5.5bn), and has reduced core fund prices and minimum investment amounts.

Net external inflows into LGIM’s Solutions business – which includes liability-driven investment (LDI) and multi-asset solutions – grew to £47.6bn (2017: £44.8bn), driven by DB pension schemes implementing a broad range of liability driven investment (LDI) strategies and high demand for multi-asset strategies from DC schemes and retail and European customers. External net inflows into multi-asset funds were £7.5bn (2017: £7.2bn). Net external inflows into Global Fixed Income of £9.5bn (2017: £8.7bn) were driven by continued strong performance across the range of funds.

The Real Assets business has continued to expand, with good growth in private credit of £3.1bn across corporate and infrastructure debt and real estate lending in 2018. The business also saw continued success with its Build to Rent business and Real Assets where AUM has grown to £27.1bn (2017: £23.8bn).

Looking ahead

In February 2019, LGIM announced that Michelle Scrimgeour would succeed Mark Zinkula as CEO of LGIM, subject to regulatory approval. Michelle will work closely with Mark to ensure a comprehensive handover before he retires from the company later this year. Michelle will join LGIM from Columbia Threadneedle Investments, where she is currently Chief Executive Officer with responsibility for the EMEA (Europe, Middle East and Africa) region.

Mark Zinkula, CEO at LGIM, continued: “The business is in a good position to continue the pattern of growth we’ve seen over the past eight years and I’m confident that Michelle is the right person to steer the business through this next stage.”