Fixed IncomeMar 9 2016

Bond run hits M&G for £10.9bn in 2015

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Bond run hits M&G for £10.9bn in 2015

M&G Investments saw another £3.5bn of net retail outflows in the final quarter of 2015 as negative sentiment on bonds took further toll on the business.

According to parent company Prudential’s results, M&G’s total net outflows from retail clients hit £10.9bn last year.

The firm’s institutional business, however, continued to see positive flows throughout the year.

Overall retail assets under management at the end of last year dropped to £60.8bn ¬ £14.9bn down on the start of 2015 ¬ with UK clients accounting for £35.7bn.

UK clients accounted for 58.8 per cent of M&G’s retail business at the end of 2015, a rise in share of 4.1 percentage points from 2014.

The £3.5bn of net outflows in the final quarter was only a slight respite, falling by £438m from Q3 and by £475m from Q2.

Despite the outflows, M&G’s operating profit for the year totalled £442m, down just 1 per cent from a year previous.

Mike Wells, Prudential Group chief executive, said: “After a period of exceptional growth, M&G had a more challenging year with retail net outflows more than offsetting positive flows from institutional new business.

“As a result total funds under management declined by 7 per cent to £246.1 billion. Despite this, IFRS operating profit of £442m was broadly in line with last year reflecting actions on costs.”