M&G’s asset management business, M&G Investments, posted a 9% year-on-year increase in profits for the first half of 2024.
The insurer said this was bolstered by strong investment performance and effective cost management.
The asset management division’s cost-to-income ratio improved to 77%, down from 79% at the end of 2023, reflecting a 2% reduction in costs to £388 million and a slight 1% increase in revenues to £499 million.
This improvement is part of M&G’s broader simplification agenda, which has already delivered £121 million in cost savings, prompting the company to raise its target from £200 million to £220 million by 2025.
M&G’s asset management division also continued to deliver strong investment performance to its clients, the firms said. As of June 30, 62% of M&G’s mutual funds ranked in the top two performance quartiles over three years, and 66% over five years.
Furthermore, over 70% of the funds in the institutional asset management segment outperformed their benchmarks on both three- and five-year horizons.
The division managed to secure net client inflows of £1.9 billion in its international institutional asset management operations, offsetting most of the pressure experienced in the UK, where outflows were notably lower than in the previous year.
Wholesale asset management saw “a good result in a challenging market for active investment solutions”, where across the market there have been £15 billion of net outflows in the UK and €18 billion of net outflows in Europe, the firm noted using industry firgures.
Andrea Rossi, group chief executive officer of M&G, emphasised the company’s resilience and the positive outlook for its asset management business. “Over the last 18 months, we have made meaningful progress transforming M&G by focusing on our strategic priorities: financial strength, simplification, and growth. Our asset management division has been a key driver of this progress, delivering strong investment performance and improving its cost efficiency,” Rossi said.
Looking ahead, M&G remains optimistic about the future, despite the ongoing macroeconomic challenges. Rossi expressed confidence in the company’s ability to continue delivering robust financial performance and growth. “As we look ahead, the strong foundations we have built give me confidence in the long-term outlook for M&G,” Rossi said.
