M&G had a tough first half to the year

M&G, the asset management arm of insurer Prudential, suffered outflows of nearly £7 billion in the first half of 2016, and the firm warns there will be further pressure on revenues for the remainder of the year. Assets under management fell from £256.5 billion to £255.4 billion.  The majority of outflows stemmed from the group's retail business, which lost £6.1 billion, with the remainder flying out of institutional funds. The business also reported a 10% year-on-year drop in operating profit, from £251 million to £225 million. Gross redemptions hit £16.7 billion, with outflows partly offset by inflows of £9.7 billion. M&G has suffered five consecutive quarters of outflows. In March, the firm reported retail net outflows of almost £11 billion, but net inflows in its institutional arm meant profits were broadly in line with the previous year. The firm has sought to calm investors, stating its downward slide will likely be short-term, and that its team retains the capabilities that saw its assets under management double between 2008 and 2015. Results for the wider Prudential group were more positive due to the performance of its Asia business. The division’s operating profits rose 15% to £743 million, and the group’s overall operating profit was up 6% to £2.1 billion. The results highlight the uphill struggle new chief executive Anne Richards faces. Richards joined the firm from Aberdeen in June, replacing the retired Michael McLintock. M&G was one of several firms that suspended its property funds in the wake of Brexit, and a recent report indicated M&G holds £11.9 billion in serially underperforming funds, the most of any UK asset manager. ©2016 funds europe

Sponsored Profiles

SPONSORED FEATURE: Alternative thinking

Mar 16, 2017

Portfolio Manager Davide Cataldo discusses the results of the Pioneer Investments’ survey on liquid alternatives and how investors can be encouraged to increase their allocation.

SPONSORED FEATURE: Interest rate risk hedging: Swapping to other options

Mar 16, 2017

Heightened margin requirements for cleared and uncleared OTC derivatives pose a challenge for legitimate hedging activities and are driving financial institutions to explore alternative hedging...

SPONSORED FEATURE: Why blockchain could be the fund industry’s next Ford Model T

Mar 16, 2017

Blockchain aims to radically change the way investors can access funds, says Olivier Portenseigne, Managing Director and Chief Commercial Officer of Fundsquare.

SPONSORED FEATURE: Open architecture: In need of protection

Mar 16, 2017

Greater efficiency must be embraced to ensure regulatory changes do not destroy choice for fund buyers, says Bernard Tancré of Clearstream.

Executive Interviews

CEO INTERVIEW: Munro gains three-year track record

Mar 16, 2017

Aviva Investors’ annual results this month were the third set since Euan Munro took over as CEO. Nick Fitzpatrick speaks to him about the ‘Aims’ fund at the heart of the firm’s outcome strategy.

DISTRIBUTION INTERVIEW: Tales of the unexpected

Mar 16, 2017

Laurence Terryn, a fund selector at Candriam, tells David Stevenson how the twists and turns of the past year’s macro environment flavoured her approach to fund selection.



Mar 07, 2017

Funds Europe speaks to leading Luxembourg industry figures about the growing regulatory demands on asset servicers and how to remain profitable in spite of major investments in technology.

SEC LENDING ROUNDTABLE: Both a borrower and a lender be

Jan 11, 2017

Industry heavyweights, including agent lenders, discuss issues affecting the securities lending sector such as regulation and the types of collateral being used.