27th May 2020 10:51
(Correcting in the first sentence the assets under management amount added to M&G by the Ascentric acquisition.)
(Alliance News) - Savings and investments company M&G PLC on Wednesday said that it has added GBP14 billion to its assets under management by acquiring Royal London Mutual Insurance Society Ltd's platform business Ascentric.
FTSE 100-listed M&G separately reported an 8.2% drop in total assets under management and administration mainly due to the "shock to markets in March from the disruption associated with the outbreak of Covid-19".
Shares in M&G were trading were up 8.8% in London at 138.45 pence each.
Ascentric is a digital wrap and wealth management platform for advisers with assets under administration of GBP14 billion, around 1,500 adviser relationships, and more than 90,000 underlying customers. It has been part of mutual insurer Royal London since 2007.
No financial details of the deal were disclosed.
Royal London Chief Executive Barry O'Dwyer said: "As part of our strategic review of the business, we explored a number of options for Ascentric. The business has been performing well following its re-platforming, and we sought an outcome that would take it to its next phase of growth.
"We believe that a sale to M&G delivers this for Ascentric, and I am pleased to have found a buyer who has a strong commitment to Ascentric's client and customer base and who is looking to further grow the business".
M&G on Wednesday also said that its total assets under management and administration declined 8.2% to GBP323 billion at March 31 from GBP352 billion at the end of 2019 due to the coronavirus disruption, but that the company's solvency ratio remained comfortably above its risk appetite throughout the crisis.
"Our Institutional Asset Management business continues to perform well through the crisis, attracting net inflows of GBP2.1 billion during the first quarter. Similarly, in the UK, our Retail Savings franchise saw net inflows of GBP0.7 billion. These positive movements were offset by Retail Asset Management net outflows of GBP5.6 billion in the quarter," M&G said in a prepared statement for its annual general meeting.
For the three months to March 31, M&G recorded adjusted operating profit of GBP134 million, reflecting a strong underlying business performance, offset by negative mark to market impacts.
M&G was formed in 2017 through the merger of Prudential PLC's UK and Europe savings and insurance operation and asset manager M&G Investments. The combined entity was spun-off and started trading on the London Stock Exchange in October 2019.
M&G also confirmed its intention to pay on Friday dividends of GBP410 million, comprising an ordinary dividend of 11.92 pence per share and a special demerger dividend of 3.85p per share.
Chief Executive John Foley said: "While markets have recovered from their March lows, I expect volatility to continue, but as an asset owner of scale we are well positioned to acquire assets at competitive prices. In the meantime, we will continue to manage the business in a prudent way, with our usual disciplined approach to capital management".
By Tapan Panchal; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
M&G