LGIM capitalises on DB de-risking trend

Legal & General Investment Management’s (LGIM) total assets under management increased by 14% over the year to the end of September 2014, reaching a figure of £676.3bn ($1.08bn) compared to Q3 2013's £594bn.

LGIM has positioned itself to capitalise on the de-risking trend among UK DB pension schemes and to meet its clients’ changing requirements.

This increase reflects net inflows of £8.0bn, down from Q3 2013 year-to-date inflows of £20.7bn, and positive market movements. 

“Looking ahead, we expect demand for our LDI strategies to remain strong as the de-risking trend continues, both in the UK and elsewhere," said Mark Zinkula, LGIM's CEO. 

"At the same time, we are creating innovative new products relevant for our defined contribution clients. In particular, we’re expanding our multi-asset capabilities, with existing products growing rapidly and new products in the pipeline. Internationally, our US business continues to gather momentum as we extend our distribution capabilities and experience continued demand for our LDI and active fixed income products.”

As a result, it continues to see strong demand for its Liability Driven Investment strategies, with LDI assets increasing by 22% to £273.0bn (Q3 2013: £222.9bn).

Net inflows of £18.4bn YTD (Q3 YTD 2013: £14.1bn) more than offset outflows in LGIM’s UK index business, as schemes mature and move from growth strategies towards lower risk portfolios.

LGIM’s total international assets increased by 45% to £86.5bn (Q3 2013: £59.6bn), with new flows of £7.2bn (Q3 YTD 2013: £14.0bn). In the US, there were further inflows into LDI and active fixed income, with AUM increasing 119% to $77.4bn by the end of Q3 2014 (Q3 2013 $35.3bn), including the Global Index Advisors assets, acquired in May 2014, of $23bn.

Elsewhere, LGIM’s property business enjoyed continued demand from both retail and institutional clients, with net inflows of £1.1bn for the period (Q3 YTD 2013: £0.6bn). Against this backdrop, AUM increased 27% to £13.2bn at Q3 2014 (Q3 2013: £10.4bn).