L&G cheers push into private credit as profit jumps
Legal & General cheered a rise in profit amid a greater push into private credit by its asset management arm.
The FTSE 100 firm toasted the “continued fundraising success” across its private markets investments as it vowed to increase investment over the next two years.
Total private markets assets under management (AUM) jumped by more than a fifth to £79bn during the period, L&G said, including growth across private credit, real estate and infrastructure funds.
The company has set a target to exceed £85bn of private markets AUM by 2028.
“The continued expansion of private markets demonstrates the growing depth and diversification of the platform,” L&G said.
“Growth across private credit, real estate and infrastructure funds…strengthens L&G’s institutional and wealth proposition and supports the longer-term shift towards higher margin, capital-light growth.”
Profit jumps
The asset management and insurance giant reported a seven per cent increase in core operating profit, a measure of profit excluding corporate investments, to £918m for the first six months of the year, broadly in line with analyst expectations.
Core operating earnings per share jumped 11 per cent to 12.1p, exceeding group guidance of six to nine per cent.
Profit before tax climbed to £1,997m from £406m, reflecting gains earned on the sale of its US business.
Share buyback continues
The FTSE 100 group confirmed it had completed £450m of its £1.2bn share buyback programme. It plans to return £5bn to shareholders by 2027.
The board declared a two per cent increase in its interim dividend to 6.2p per share.
Institutional retirement wrote £5.7bn in global pension risk transfer (PRT) deals during the period. In the UK, it wrote £3.5bn in schemes but anticipates lower market volumes in the second half of the year than previously expected.
The group’s retail channel posted £198m in profit before tax, driven by larger contributions from its retail retirement segment and an improved workplace performance.
Workplace defined contribution flows jumped to £6.2bn, while retail annuity sales increased 36 per cent to £1bn.
L&G shares fell 1.2 per cent to 299p in early trade on Wednesday. The stock is up more than 15 per cent since the start of the year.