Asset manager M&G (MNG) posted maiden annual results after being spun-off from the Prudential in October 2019, with adjusted operating profit coming in at £1.2bn. This was in-line with analyst estimates but the shares enjoyed their share of the wider coronavirus bounce, rallying 3% to 178p.
Strong investment returns lifted assets under management (AUM) by 9.7% to £352bn, offset by net client outflows of £1.3bn. Investment performance is the life-blood for active fund managers, so it was pleasing that 59% of the firm’s mutual funds delivered above median returns over three-years to the end of 2019.
Chief executive John Foley commented: ‘Our diversified investment capabilities, coupled with our client relationships in 28 markets, mean we are well positioned to meet the growing global demand for savings and investment solutions, supported by favourable long-term economic and social trends that offer growth opportunities for many years to come.’
As outlined at the time of the demerger, the company will pay a special dividend of 3.85p per share as well as an ordinary dividend of 11.92p, representing almost 9% of the current share price.
Despite ongoing fee pressures from the continued growth of passive investing, the firm’s strategy to provide more active high value investment solutions to more clients across markets where the company sees client demand seems to be working.
The firm committed around $1bn of new investments in Asia and the US in private asset markets, while it has raised a second infrastructure greenfield fund, expected to close in the second quarter with a target of £1.25bn.
In institutional asset management the company won 67 new mandates in the UK and 47 in Europe. The international asset origination teams were strengthened by the hiring of a team of Asia-Pacific fund managers to increase coverage in the region.
In addition to focusing on growth, the company confirmed it was on target to achieve annual savings of £145m a year as part of its five-year transformation programme.