M&G outflows triple to £7bn


M&G saw outflows of almost £7bn in the first half of the year compared to £2.3bn a year ago.

In its half year results, published today by parent company Prudential, the business said the “continuation of net outflows” impacted operating profits, which dropped by 10 per cent to £225m from £251m.

In particualar, outflows almost doubled in its retail business at £6.1bn in the first half of 2016, up from £3.4bn a year ago.

M&G funds under management within the retail business slumped around £10bn to £59.2bn from £69.1bn in the first half of 2015.

Overall across the firm, FUM were down to £255.4bn, from £256.5bn a year ago.

The firm saw gross outflows of £16.7bn for the period, down from £22.8bn a year ago.

Prudential group chief executive Mike Wells says: “Although this is likely to impact short-term earnings prospects, M&G remains a highly regarded franchise and the skills and capabilities that saw external assets under management double between 2008 and 2015 are very much intact.”

Wells adds that M&G has “the scale, diversity and capabilities to outperform markets” over the long term. He says that new chief executive Anne Richards is “working closely” with the team to improve performance and face any headwinds Brexit might cause.

Overall, UK insurance and asset management operating profit across Prudential, including M&G, increased by 3 per cent to £730m.

Operating profit rose 15 per cent to £743m within its Asian business, and overall group operating profit was up 6 per cent to £2.1bn.

Wells says: “The group has delivered good progress on its key operating metrics… in a period of heightened macro-economic, geopolitical and investment market uncertainty and volatility.

“In the US and the UK, we continue to successfully manage the effects of market turbulence. The quality of our earnings, geographic diversity and strong balance sheet position us well to grow over the long term. We remain on track to achieve our 2017 financial objectives.”