Legal & General becomes UK’s first £1trn investment manager

Legal & General has become the UK’s first £1 trillion investment manager after unveiling a 10 per cent rise in profits following a spate of infrastructure deals last year and as sales of annuities soared to record levels.

Legal & General becomes UK’s first £1trn investment manager

Nigel Wilson

The group said alongside its annual results that money pumped into infrastructure, clean energy, commercial real estate and residential property across British cities by its investment arm and an increase in international assets helped it reach the landmark figure.

Legal & General Investment Management added £42.6 billion in assets in 2018, as assets under management rose 3 per cent to £1.02 trillion.

Legal & General is led among European fund managers only by Amundi, based in Paris, which controls £1.3 trillion of assets. Mr Wilson said that Legal & General had a 1.6 per cent share of the approximate $80 trillion global market for funds.

Chief executive Nigel Wilson acknowledged the negative effect of political uncertainty on asset prices, but said: “2018 saw political uncertainty, asset market declines and slowing economic growth, but we are resilient and performed strongly.”

“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.”

Full-year figures showed that the FTSE 100 company saw operating profit rise 10 per cent to £1.9 billion in 2018.

The firm said it was helped by customers dying earlier than expected, or what it called a “heavier than expected mortality experience in 2018”.

At a group level, Legal & General made an operating profit of £1.9 billion, up 10 per cent on the year before. 

Net profit fell 3 per cent to £1.83 billion after the prior year was boosted by a one-off US tax benefit.

The firm also released £433 million of cash reserves.

Legal & General booked record annuity sales of £10 billion in its pensions business, while its insurance arm saw gross written premiums rise 3 per cent to £2.62 billion.

Jeff Davies, chief financial officer, said that the business was actively quoting on about £20 billion in annuities deals this year and that the market was expected to hit record levels of about £30 billion in 2019.

In the US, protection saw new business annual premiums grow by 12 per cent and international assets jumped 13 per cent to £258 billion.

“Our strategy positions us well despite the broader environment, our current trading is strong and we expect this momentum to continue in 2019,” Mr Wilson added.

Share icon
Share this article: