M&G tilts focus to life channel as asset management demand stalls

M&G, the FTSE 100 investment giant, has shifted its focus to the life channel as its asset management demand has slowed, according to recent financial reports. In the third quarter, the company generated net inflows of £1.8bn, remaining stable from the previous year, with the majority of the inflows coming from its Life channel.

This segment, which includes personal insurance and bulk purchase annuities (BPA), generated £1.1bn in net inflows. The Prufund option under this segment alone yielded over £100m in net inflows, boosted by its recent launch on Scottish Widows' platform.

M&G has recently raised its full-year guidance for BPA sales to £2.5bn, CEO Andrea Rossi stating that this signifies the "success in reigniting" the business and returning the group's focus back to the pension risk transfer market. Rossi added that the company's resilience and the attractiveness of its diversified offerings are reflected in the inflows.

However, the asset management arm of M&G has struggled, with net inflows in this channel falling 53% from the previous year to £0.7bn. This decline was due to an uptick in client exits and a downturn in private market fundraising. The wholesale asset management channel saw the sharpest decline, with net inflows dropping 53% to £100m.

The higher-margin private market division also experienced a sharp decline, with inflows falling by 87.5% to £0.1bn. Public markets contributed to the majority of net inflows, accounting for £600m.

M&G's total assets under management and administration (AUMA) also fell over the period, reaching £385bn from £387bn in the prior quarter. The life channel recorded the largest fall in AUMA, decreasing to £194bn. The investment giant attributed this decline to "small adverse market movements" offsetting further growth. Despite these challenges, M&G's AUMA remained broadly flat at £355bn, as new client money offset losses from market headwinds.