Legal & General becomes UK’s first £1 trillion fund manager
Legal & General became Britain’s first £1 trillion fund manager after seeing off a stock market downturn.
The insurer’s fund arm, Legal & General Investment Management, added £42.6 billion last year despite the worst market conditions for a decade.
The company said it had taken advantage of the “globalisation of asset management” to reach the figure.
More workers saving into pensions —LGIM controls nearly a fifth of the £338 billion defined contribution market — also contributed to the milestone figure. Assets under management for the year ending December rose 3% to £1.02 trillion.
The division is led by Mark Zinkula. Columbia Threadneedle’s European chief Michelle Scrimgeour is set to take the reins in August
Of European fund managers only French rival Amundi exceeds Legal & General with £1.3 trillion of assets.
Legal & General reported results in line with expectations, aided by a larger than expected financial boost from people dying faster than expected.
The company received £433 million, up from £332 million, from money put aside to cover expected death and pension payouts. That helped increase operating profits 14% to £2.3 billion.
“It’s a very sad societal outcome,” said chief executive Nigel Wilson. “We used the best brains to estimate what the improvement in longevity would be over a period of time and we’ve got it wrong. People are dying much quicker than we thought but also living longer with chronic ill health.”
He said the company was ploughing the money back into investing in towns and cities to improve transport, health and housing. “We’re not engaged in short-term share buybacks. We’re investing for the long term,” he said.
