Legal & General Investment Management.

Salford

WORLD CLASS INVESTMENT MANAGEMENT

Our business is built on people. We develop long-term relationships by supporting the things our clients value; and by designing and building solutions around them.

Video

The Pension Revolution

04:02

Read the transcript
<a href="../files.shareholder.com/downloads/LGEN/pension_revolution_transcript.pdf"></a>Transcript of the video - An ITN production - The pension revolution, presented by Natasha Kaplinsky

Role and purpose: Legal & General Investment Management (LGIM) is our global asset management business, managing investments on behalf of our institutional and retail customers. We're the largest manager of UK DB pension fund assets.

We provide investment expertise across a wide spectrum of asset classes including equities, fixed income, commercial property and cash.

Our capabilities range from index-tracking and active strategies to liquidity management and liability-based risk management solutions.

Percentage of 2015 divisional operating profit: 21% (£355m)

Where we operate: UK, US, Middle East, Europe and Asia

CEO: Mark Zinkula

Established: 1975

Recent achievements: We remain the market leader in pension risk-management solutions in the UK, with over 40% of the Liability Driven Investment (LDI) market.

We continued to develop our comprehensive range of products available to DC customers with the launch of our Pathway Funds, now having over £3.8bn on the investment only platform. The win of several significant mandates in 2015, including a number of large high street retailers, took total workplace pension customers to 1.8m. Total DC assets have increased by 13% to £46.1bn.

International AUM net flows in 2015 were £9.5bn. As a result total international AUM increased 7% to £122.4bn, primarily driven by growth in the US of £6.3bn. We won our first multi-billion dollar US Index mandate in 2015 and continued to attract significant LDI and Active Fixed Income inflows.

In Asia, we won new mandates in Korea, Taiwan, and Japan. We also signed a co-operation agreement with Meiji Yasuda, the third largest insurance company in Japan. Total net flows in Asia were £0.8bn.

Mark Zinkula

Mark Zinkula

What we manage: We have £746 billion in assets under management for around 3,000 institutional clients. This chart shows LGIM total assets at 31 December 2015 split between the various stands of business. Total assets is the total amount of money investors have trusted to our fund managers to invest across our investment products together with advisory and overlay assets associated with our Solutions business.

LGIM Total Assets as at 31 December 2015

Pie shart: £338.2 billion solutions, £274.3 billion index funds, £106.8 billion active fixed income, £26.8 billion other

Source: Full Year Results 2015

Workplace Pensions:Our workplace pensions platform, has 1.8 million members and £14.7 billion of assets. We offer a comprehensive DC customer proposition for employers, covering scheme administration as well as investments.

The introduction of auto-enrolment in the UK could result in a tripling of DC savings over the next 10 years. Statutory minimum contribution rates will increase from 2% today to 5% in 2017 and up to 8% in 2018. Longer term, we expect DC savings to be significantly greater than the existing DB assets that we manage. Our workplace business is building the scale to capitalise on this trend, successfully winning c20% of all new members coming to market. The integration of workplace into LGIM will further strengthen our already strong position, enabling us to continue delivering market leading capabilities to all our clients.

Growth in UK market achieved on multiple fronts

Source: Full Year Results 2015