Thursday 17 October 2019

Legal & General becomes UK’s first £1 trillion investment manager

Assets under management rose 3% to £1.02 trillion.

Happy days at LandG (PA)
Happy days at LandG (PA)

By Ravender Sembhy, Press Association City Editor

Legal & General has become the UK’s first £1 trillion investment manager following a spate of infrastructure deals last year.

The group said alongside its annual results that money pumped into infrastructure, clean energy, commercial real estate and residential property across British cities by its investment arm and an increase in international assets helped it reach the landmark figure.

Legal & General Investment Management saw assets under management rise 3% to £1.02 trillion.

Boss Nigel Wilson flagged the negative impact political uncertainty was having on asset prices, but nevertheless said L&G performed strongly.

He said: “2018 saw political uncertainty, asset market declines and slowing economic growth, but we are resilient and performed strongly.

“We became the UK’s first £1 trillion investment manager, executed a record £9 billion of pension risk transfer deals and invested billions in the UK’s future infrastructure and cities.”

Full-year figures showed that the FTSE 100 company saw operating profit rise 10% to £1.9 billion in 2018.

The firm said it was helped by customers dying earlier than expected, or what it called a “heavier than expected mortality experience in 2018”.

L&G released £433 million of cash reserves.

Net profit fell 3% to £1.83 billion after the prior year was boosted by a one-off US tax benefit.

Legal & General booked record annuity sales of £10 billion in its pensions business, while its insurance arm saw gross written premiums rise 3% to £2.62 billion.

In the US, protection saw new business annual premiums grow by 12% and international assets jumped 13% to £258 billion.

“Our strategy positions us well despite the broader environment, our current trading is strong and we expect this momentum to continue in 2019,” Mr Wilson added.

Shares in L&G were down over 4% in morning trade at 272p.

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: “A lower than hoped for solvency ratio and a miss on cash generation hit Legal & General’s share price immediately after results were announced, but we think the underlying trends remain supportive of the long-term investment case.”

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