Legal & General: FTSE 100 giant touts asset management plans
Legal & General is set to delve further into the asset management markets after outlining its fresh growth plan on Tuesday.
The firm’s asset management arm, which oversees £1.1 trillion in assets, is setting out targets for the coming year to notch over £500m in operating profit. If successful, this would mark a sharp jump from £400m in 2024.
Eric Alder, the chief executive of Legal & General’s asset management division, said: “Asset management’s synergistic relationship with the broader L&G Group provides a structural advantage as global demand accelerates for sophisticated investment solutions.
“Within the broader L&G ecosystem, our balance sheet acts as a permanent source of capital—catalysing new fund strategies and driving fee growth.”
This comes as rivals flee from asset management operations, with the likes of French Insurer Axa selling its asset manager to BNP Paribas last August and British insurer Aviva reducing its equities unit.
The business is set to take a renewed focus on US operations and expand operations across private markets, wealth and wholesale.
This follows L&G’s acquisition of US real estate investor Proprium in a bid to further entrench its business across the Atlantic.
Legal & General is also set to push further with its Private Markets Access Fund, which has grown to nearly £1bn in under a year.
Analysts back Legal & General stock
Management is eying a cost income ratio – which indicates a firm’s efficiency through comparing expenses to takings – of under 70 per cent, down from 74 per cent in 2024.
Panmure Liberum analyst Abid Hussain said the target “doesn’t feel like much of a stretch if we take a longer historical view and assume there will be positive net inflows.”
Hussain said growth would mainly come through defined contribution pensions and annuity business, which he predicts will offset a slump in traditional defined benefit pensions in the UK.
Panmure Liberum rated L&G stock a buy and set a target price of 335p.
The broker expects the group’s core earnings per share growth to be between six and nine per cent for 2024, falling in line with group expectations.
Alder said: “We’ve taken important early steps and I’m energised by the pace of delivery – investments in Taurus and Proprium, alongside momentum in private markets and major client wins, are proof points of this strategy in action.
“With clarity of purpose, disciplined focus, and the backing of the wider Group, we are exceptionally well placed to deliver for clients and shareholders alike.”