LGIM delivered a record six months IFRS operating profit in the first half of 2011, up 19% to £117m (H1 - 2010: £98).
The combination of innovative risk-reducing products and solutions, strong fund performance and an expanding distribution platform has resulted in net fund flow of £3.0bn during the first half of 2011. Coupled with higher market levels, assets under management rose to £362bn (H1 2010: £320bn).
Mark Zinkula, LGIM CEO, said: "This is another excellent performance for LGIM with fund growth across all areas of our business. It is very pleasing to see the positive results coming from an increasingly broad geographic area and diverse set of capabilities."
Proactive client service
Critically, LGIM's growth has been achieved with a focus on the changing needs of existing clients.
A core part of LGIM's UK business focus is on providing investment solutions for Defined Benefit (DB) pension schemes which are increasingly looking to reduce their funding level volatility (or ‘de-risk'). "Our strengths in Index Management, Liability Driven Investment and Active Fixed Income have enabled us to deliver innovative and effective investment solutions, tailored to client requirements. We believe these capabilities continue to offer the principle building blocks for de-risking strategies in what continues to be a volatile market environment", Mark commented.
Gross UK flows were £14.7bn (H1 2011: £18.8bn) and LDI assets grew 19% to £44.9bn (H1 2010: £37.6bn).
New markets, steady focus
Alongside excellent performance in the UK, LGIM's international diversification strategy continues to build momentum with new mandates in the USA, Middle East and Europe. International gross new business during the period was £3.2bn representing 18% of total new fund flows (compared with £2.4bn or 15% in H1 2010). LGIM's internationally sourced assets now stand at £17.3bn, up 53% over the period from H1 2010 (£11.3bn).
Mark said: "This is an exciting time for LGIM and I am confident that we are well placed to exploit the new business opportunities that we see emerging both here in the UK and overseas. As we expand our business into new markets and become a more international organisation, it is vital that we retain the same client focused, results oriented approach which has served us so well to date."
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