L&G reports 18% increase in DC AUM

Legal & General Investment Management (LGIM) has reported an 18 per cent increase in defined contribution assets under management (AUM).

Publishing its 2018 results, L&G said that the DC business “continued to grow rapidly” with total net inflows of £8.4bn, compared to £3bn in 2017. It also experienced an 18 per cent increase in DC AUM rising from £60.1bn in 2017 to £70.8bn in 2018.

LGIM has also experienced a 19 per cent increase in customers on LGIM’s Workplace pension platform, with the number of members now at 3.1 million, up from 2.7 million in 2017.

Furthermore, its UK master trusts recently surpassed £5.5bn in AUM, which LGIM said reflects the continued appeal of the structure for DC schemes wishing to outsource their governance, investment and administration.

In addition, LGIM reported that net external inflows into its Solutions business – which includes liability-driven investment (LDI) and multi-asset solutions – grew to £47.6bn, up from £44.8bn in 2017, which is said was driven by defined benefit pension schemes implementing a broad range of liability-driven investment (LDI) strategies and high demand for multi-asset strategies from DC schemes and retail and European customers.

External net inflows into multi-asset funds were £7.5bn (2017: £7.2bn). Net external inflows into Global Fixed Income of £9.5bn (2017: £8.7bn) were driven by continued strong performance across the range of funds.

Overall it was a strong year for LGIM, as it announced it has surpassed £1trn AUM and had external net inflows of £42.6bn, driving a 3 per cent increase in total AUM to £1,015bn (2017: £983bn).

Commenting on the results, LGIM CEO Mark Zinkula said: “2018 was a pivotal year for the business, surpassing £1trn in assets under management and building on the momentum of recent years in which we have delivered consistent growth. International expansion has been a strategic priority and we have made significant investments and key hires to ensure we have the right platform for long-term growth in all of our key markets.

“2018 was a challenging year for asset managers globally. The results announced today reflect the confidence our clients hold in us to help navigate these uncertain markets and deliver on their overall investment objectives.”

In February 2019, LGIM announced that Michelle Scrimgeour would succeed Mark Zinkula as CEO of LGIM, subject to regulatory approval. She will work closely with Mark to ensure a comprehensive handover before he retires from the company later this year. Scrimgeour will join LGIM from Columbia Threadneedle Investments, where she is currently CEO with responsibility for the EMEA (Europe, Middle East and Africa) region.

“The business is in a good position to continue the pattern of growth we’ve seen over the past eight years and I’m confident that Michelle is the right person to steer the business through this next stage," Zinkula said.

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