The group’s pension assets were driven by positive net flows across “every client segment, region and product level” it said, with the National Grid pension scheme, integrated in Q4, adding £12bn of inflows.
LGIM also reported an 8% growth in assets under management to £746.1bn, up from £693.7bn in 2014.
Broad demand
LGIM is seeing strong net inflows across its range of products, with demand for liability-driven investment, multi-asset, real assets and fixed income dominating.
In addition to retail sales continuing to rise, LGIM says it hopes to increase the customers on its defined contribution platform to around two million by the end of 2016.
“We are planning for more global economic and market volatility and are well positioned for continued pressure on pricing and changes in product mix in our industry."
“LGIM’s strategy is based on being a low-cost scalable provider of fund management products and as such is well placed to be a net beneficiary from the expected pricing pressure across the asset management market,” the company said.
Group results
Legal & General posted a 14% increase in both net cash generation and operating profit.
The group is still growing its distribution across the Gulf, Asia, the US, and Europe and hopes to its continue its “positive international momentum”.
L&G holds a Solvency II surplus of £5.5bn, which it says provides a coverage ratio of 169% and will be used to cover against pension transfer business.
Nigel Wilson, group chief executive, says: “We had already moved to a capital-lite model for UK pension risk transfer business in anticipation of the new Solvency II regime and we will use our Solvency II surplus capital of £5.5bn to continue to deliver on our strategy.
“We have a robust business model, which has proved to be adept and resilient in dealing with fiscal and regulatory changes in our sector.
“We are planning for more global economic and market volatility and are well positioned for continued pressure on pricing and changes in product mix in our industry.
“Our strategy is aligned to growth for our markets, meeting our customers’ needs and delivering socially useful products. We remain confident in the outlook for our business,” Wilson added.
The results confirmed the sale of Sipp provider Suffolk Life, to Curtis Banks, should be completed in the first half of this year.
Platform businesses
Elsewhere L&G said its platforms business delivered net flows of £3.5bn, a 35% decline on last year’s £5.4bn asset flows, with Cofunds managing to deliver its £11m cost savings by the end of 2015 – as agreed at the time of whole acquisition.
Mature retail savings took a hit of £2.8bn to cover the disposal of offshore arm L&G International (Ireland), which was sold to Canada Life in February 2015.
The globalisation of assets is listed as one of the group’s key strategic growth drivers, with 1% share of global asset markets, LGIM was the 15th largest asset manager in the world, with plans to grow through its UK, US and Asian hubs; as well as expand its distribution footprint.
