A sharp acceleration in bulk purchase annuities stopped M&G from sliding into net outflows in the third quarter, as asset management demand slowed.
The investment manager generated net inflows of £1.8bn in the third quarter, remaining flat from the prior year, with the majority recorded by its Life channel.
The segment, which handles personal insurance and bulk purchase annuities (BPA), delivered £1.1bn of net inflows. Its Prufund option generated over £100m of net inflows, supported by its launch on Scottish Widows’ platform.
The group has now lifted its full year guidance for the BPA sales to £2.5bn, which chief executive Andrea Rossi said demonstrated the “success in reigniting” the business and shifting group focus back to the pension risk transfer market.
“In a volatile external environment, we continued to grow and make good progress against our strategic objectives,” said Rossi.
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M&G asset management arm struggles
The FTSE 100 group’s asset management arm failed to keep pace with the wider business, after an uptick in client exits and a downturn in its private market fundraising damaged inflows.
Net inflows in the channel fell 53 per cent from the prior year to £0.7bn, with wholesale asset management reporting the sharpest decline.
Inflows tumbled to £100m from £700m, while client redemptions also spiked to £5.1bn.
Its higher-margin private market division also saw inflows dry up, tumbling 87.5 per cent to £0.1bn. Public markets accounted “for the majority of net inflows” at £600m, M&G said.
Total assets under management and administration (AUMA) also slipped over the period, falling to £385bn from £387bn the prior quarter.
Despite the growth in BPA solutions, the life channel recorded the largest fall in AUMA, decreasing to £194bn. The investment giant blamed the decline on “small adverse market movements” offsetting further growth.
Asset management’s AUMA remained broadly flat at £355bn, after new client money offset losses from market headwinds.