Legal & General Investment Management.

Salford

What we do

Our role and purpose

We provide investment management services for pension schemes and institutional clients, manage auto-enrolled pension schemes and retail investments. We also have a successful real assets investment business.

Where we operate

The UK remains our largest source of assets and profits but we have developed a successful investment management business in the US based in Chicago (pictured) and have newer businesses in Europe, the Gulf and Asia.

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

Percentage of divisional profit

Legal & General Investment Management represent 19% of group divisional operating profit and are our second largest business segment.

Mark Zinkula

Chief Executive Officer:
Mark Zinkula

Read Mark's profile

Assets under management

  • We have £894 billion ($1.1 trillion) in assets under management
  • We have grown assets strongly in all our key market segments:
Assets under management
  • We are maintaining a strong position in UK DB and DC as pension schemes are seeking a broader range of solutions
  • We're continuing to diversify the business through the growth in Solutions, Active Fixed Income and Real Assets
  • We are experiencing growth in Active Fixed Income (AFI) driven by UK and US institutional clients
  • We're well positioned in Index, with strong inflows from international and retail clients as the business expands its distribution strategy
  • We're strengthening private credit capabilities and increasing Real Assets AUM

Strategic execution

1. Core strength in UK defined benefit pensions

UK DB pension sokutions journey

  • We're the largest UK DB pension manager with a 32% market share. We're the largest UK LDI manager with 45% of market
  • Our core DB business continues to evolve, with strong growth in active and pooled LDI and increasing momentum in fiduciary management strategies
  • We are continuing to build a broader range of capabilities, with a focus on liability aware investing, diversified growth strategies and real assets

2. Continued growth in DC pensions and retail business

Continued growth in DC pensions and retail business
Market leading capabilities for UK DC clients:
  • In 2016 we saw strong growth in DC assets, up 24% to £57.1bn
  • The number of pension schemes serviced has more than doubled to over 9,400
  • We're building a presence in the SME market following investment in Smart Pension, an auto-enrolment platform
  • We've achieved leadership in product development (Multi- Asset Funds, Pathway Funds, Future World Fund)
Accelerating growth in our Retail business:
  • In 2016 we had a robust performance in a challenging market, with positive net flows every month and net new business of £1.4bn (2015: £1.2bn)
  • Our AUM increased to £24.1bn
  • We continue to build our offering in Index, Multi-Asset and Active Specialties with increased focus on sales through wealth managers

3. Successfully expanding internationally across all regions

Successfully expanding internationally across all regions

  • In 2016, we had total international AUM of £177.4bn, a 45% increase (2015: £122.4bn)
  • There were strong net international inflows of £14.5bn (2015: £9.5bn)
  • We saw significant growth in the US business, with net flows of £9.4bn (2015: £6.3bn). Therte was a growing demand for Index and continued strength in Solutions and Fixed Income
  • We're expanding into the US DC market and developing US Real Assets capability
  • We saw higher net flows across Europe (£2.6bn), the Gulf (£1.6bn) and Asia (£0.8bn)
  • We're expanding our range of SICAV and ICAV products for international markets
  • We're developing trading and fund management capabilities in Hong Kong
  • We opened an office in Tokyo

Focus on corporate governance – active ownership

As a leading investor, LGIM believes we have a responsibility not just to our clients but to society as a whole. We use our scale and influence to encourage the companies in which we invest to develop resilient strategies, think longer term and consider all of their stakeholders. We also work towards improving wider market standards, policies and regulations because we believe that good governance protects and enhances long-term prospects for our clients.

Our independent Corporate Governance team, led by Sacha Sadan, focused on three key initiatives in 2016:

  1. climate change
  2. board accountability and diversity
  3. executive remuneration

Our Governance team held in 2016

500 meetings including

39% with companies outside the UK

23% UK companies voted against (at least one resolution)

47% discussing environmental and social issues

Further Information

LGIM's main website: www.lgim.com/global/

LGIM's US business (LGIMA): www.lgima.com/

LGIM's real assets business: www.lgim.com/uk/en/real-assets/

LGIM's auto enrolment business: www.legalandgeneral.com/workplacebenefits/employers/workplace-pension/auto-enrolment/