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LGIM absorbs £14.8bn passive hit to join £1 trillion club

LGIM absorbs £14.8bn passive hit to join £1 trillion club

Legal & General Investment Management’s (LGIM) assets under management (AUM) topped £1 trillion last year as the group reported net inflows of £42.6 billion in 2018.

Total AUM increased to £1.015 trillion, up from £983 billion at the end of 2017.

The group said: ‘Despite tough markets for asset management globally, LGIM remains structurally well positioned for growth, as reflected in our strong flows performance in 2018.’

Breaking down LGIM’s flows, the firm reported £47.6 billion of net inflows into its Solutions, liability-driven investment strategies and £9.5 billion of net new money into its global fixed income funds.

However, it saw £14.8 billion of net outflows from its index funds, up from £10.3 billion last year. The company blamed this on maturing defined contribution pension funds de-risking and the loss of a £6 billion local pension scheme mandate.

At a group level, Legal & General reported that pre-tax profits rose by 2% to £2.13 billion, with operating profits at LGIM also rising by 2% from £400 million to £407 million. Legal & General has raised the full-year dividend by 7% to 16.42p.

On a forward view, the company said it is aiming to improve LGIM’s online proposition and will continue to ‘increase automation and simplification, through data analytics, providing a digital experience for our customers’.

Legal & General group chief executive Nigel Wilson (pictured) said: ‘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.’ 

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