Legal & General has reported a decline in assets under management (AUM) despite operating profits rising 2% above expectations.
The insurance and pension giant released its first half year results for 2024 today (7 August).
The firm’s asset management division registered a decline in AUM compared to last year. It said total AUM reduced by 3% year-on-year to £1.1bn.
The FTSE 100 firm attributed the decline to increased investment in modernising the asset management platform and driving growth.
In June 2024, L&G, under new boss António Simões, announced plans to merge its two asset management arms – L&G Investment Management and L&G Capital – to create a global private asset manager.
The firm said it has made “good momentum” in private markets and launched a new fund to offer diversified exposure to defined contribution pension scheme members.
L&G reported external net flows of £28.5bn and said this reflected UK defined benefit (DB) clients adjusting their portfolios in response to improved funding ratios.
The pension provider added it is “well placed” to support DB clients with preparing schemes to achieve buy out as the DB market matures.
In a bumper year for annuity sales, the firm has seen record levels of retail annuity business with £1.2bn of individual annuities.
This doubles last year’s figure of £575m.
L&G also reported a core operating profit of £849m for the half-year. This is up from £844m during the same period last year.
Its total operating profit came in £920m, £4m lower than the first half of 2023.
L&G chief executive António Simões said the results “reflect the ongoing strength of our business”.
Core operating profit was slightly ahead of last year and Simões said he expects 2024 core operating profit to grow by mid-single digits year-on-year.
“Looking ahead, we are well positioned to continue to execute our strategy with pace and ambition, delivering growth and value for all our stakeholders,” he added.
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