Legal & General Investment Management (LGIM) has announced a consolidated set of financial results for its subsidiaries for the first half of 2020.
The results cover just over three months of lockdown in the UK as a result of the coronavirus pandemic, with the subsequent economic damage having a notable impact on markets between February and June.
Assets under management (AUM) for LGIM increased 9% to reach a total £1.24trn up from £1.13trn recorded in H1 last year.
L&G's overall operating profit fell by £59m as compared to H1 last year, landing at £946m for the six months to June, compared to just over £1bn last year. However, with the estimated impact of Covid-19 amounting to £129m, L&G said the smaller reduction in operating profit demonstrated resilience.
External net flows dropped significantly however, with the firm recording £6.2bn in external flows compares with £60.3bn in the first half of 2019. Net flows were 0.5% of opening external AUM, driving by flows of £8bn into LGIM's defined benefit and defined contribution businesses.
Total revenues were still up 8% however, and reached £467m support by growth in both external and internal business.
LGIM said the firm benefitted from its "combination of scale businesses" and a "diversified asset base" during the pandemic, which were also supported by "structural demand for its products and investment capabilities".
Chief executive officer Michelle Scrimgeour said: "The resilience of our first half-year results reflects the value of our existing client base and the importance of establishing strong and enduring relationships.
"The firm was quick to adapt to a new way of working and has continued to engage proactively and productively with clients. This has allowed us to face the challenge well and we are grateful for the continued confidence of our clients during this difficult time.
"The business has continued to deliver positive external net flows in the first half of 2020 and has grown AUM and I want to thank all of my LGIM colleagues for their magnificent teamwork and for supporting each other and our clients during these uncertain times."
Despite Covid-19 the year is still expected to be the second-largest for bulk annuity transactions, with Legal & General Retirement Institutional (LGRI) having written 53% more transactions globally by count compared with H1 2019.
Just over three quarters (76%) of LGRI's UK transactions were with LGIM clients, with the business looking to write a further £40-£50bn of new UK transactions by 2025.
However, total volumes insured for UK schemes were down, at £3.2bn compared to £6.3bn in the first half of last year.
LGRI chief executive Laura Mason said: "While this first half has seen fewer of the ‘mega deals' of 2019, predictions still point to 2020 being a highly successful year for the pension risk transfer (PRT) market.
We look forward to continuing to offer de-risking solutions, for schemes of all sizes, with new and existing clients - the past six months have demonstrated the continued appetite for PRT across the UK and US market, particularly from smaller schemes taking advantage of our innovative solutions and the favourable pricing conditions."
As more schemes look at building a CDI strategy amid the economic crisis, Sebastien Proffit looks at what to consider.
Scottish Widows has invested £2bn of pension fund assets to become the inaugural investor in BlackRock’s authorised contractual scheme (ACS) Climate Transition World Equity Fund.
The coronavirus-induced economic crisis has demonstrated the liquidity benefits of credit default swap indices, says Olivier Debat.
In this live blog, Professional Pensions' sister title Investment Week collates all the breaking market news, analysis and opinion on equity, bond and currency movements as well as the impact of trade wars, tightening monetary policy and the Brexit negotiations....
Corporate and Strategic fund