Legal & General Investment Management sees LDI gains

Pay increaseNet flows at Legal & General Investment Management (LGIM) have dropped this year, though the firm has managed to increase total assets unde

r management (AuM) by £82 billion (€105 billion) due to still positive net new money and market movements.

In the nine months to the end of September LGIM saw a 61% drop in total net flows of new money, including a 49% drop in international flows, compared to the same period last year.

But flows remained positive at £8 billion, including £7.2 billion for new international money. The flows and market movements mean total AuM increased by 14% to £676.3 billion, or €865 billion.

Reporting its Q3 results today, LGIM saw outflows in its UK index business, but says these were offset by demand for liability-driven investment (LDI) strategies.

Year-to-date outflows from the firm's large index business were £11.8 billion. The same period last year saw £2.4 billion of inflows.

The index outflows reflect a de-risking trend in UK defined benefit pension schemes, the fund manager says, which benefited LGIM's LDI business. LDI mandates picked up £18.4 billion in the year-to-date period, representing a 22% increase over the same period last year to stand at £273 billion.

LGIM says its has a 20% market share of the UK DB market and 40% share of the UK LDI market.

However, the firm also reports a fall in institutional index wins from international investors. The manager, owned by insurance company Legal & General Group, has been increasing its overall international assets in recent years, which thanks to the net gain in new money this year, now stand at £86.5 billion. This is a 45% increase over year-to-date Q3 2013, and a trebling over the last four years.

©2014 funds europe