Legal & General Investment Management’s UK retail business saw an increase in net inflows in 2016 despite the “challenging year for active managers”, with net sales increasing from £1.2bn to £1.4bn since 2015.
LGIM ranked third for UK net retail sales in 2016, according to the Pridham report. However, total net flows dropped from £33.3bn in 2015 to £31.2bn in 2016. External net flows also fell from £37.7bn in 2015 to £29.2bn.
In the firm’s Solutions business – which includes multi-asset solutions – net sales were positive but flat at £34.7bn, with sales driven by interest from pension schemes.
Total International AUM increased by 45 per cent to £177.4bn, up from £122.4bn, which the firm attributed to due to positive flows, recovering equity markets, the weak pound and strong performance in the US business.
LGIM’s asset management profit, excluding the one-off adjustment for discontinuing box profits, was up 7 per cent, while operating profit was up 3 per cent at £366m, up from £355m.
The firm admits the LGIM Real Assets arm “was adversely impacted by the slowdown in the property market as a result of the EU referendum” but saw net inflows in Q4, with total AUM of £19.6bn, up from £18.3bn.
Mark Zinkula, CEO at LGIM, says: “We have delivered robust results in a challenging environment and continue to successfully expand our business. The fact that we once again delivered growth across all distribution channels and regions in 2016 was a significant achievement. We are building on our leading position in the UK defined benefit (DB) market, but our growth is increasingly coming from the DC and retail sectors and our target international markets.”
In its 2016 results, published today, L&G says it made a £60m net loss on the sales of Cofunds, related business Investor Portfolio Service, and the separate sale of Sipp provider Suffolk Life.
L&G completed the sale of Cofunds and IPS to Aegon in January this year for £147.5m. L&G’s investment in the Cofunds platform resulted in an impairment of £64m in 2016, which was offset by a £4m profit on the sale of Suffolk Life to Curtis Banks for £45m.
Overall pre-tax profit is up 17 per cent from around £1.4bn to £1.6bn.
Profits in L&G’s retirement business rose 27 per cent from £641m in 2015 to £811m last year, while profits at L&G Investment Management were relatively flat over the same period, going from £355m to £366m.