M&G reports net inflows of £4.9bn

10 August 2012 | By Chris Salih

M&G Investments has recorded a 69 per cent increase in net inflows to £4.9bn in the first half of 2012.

The figure is up on the £2.9bn recorded in the first half of 2011 with net retail sales accounting for £4.3bn of net inflows.

Funds under management remained largely unchanged at £204bn at 30 June 2012 – compared to £203bn at the end of June 2011. M&G says this is due to the group reducing its stake in its South African subsidiary.

Underlying profit before performance related fees stood at £168m at the end of the first of 2012, a rise of 14 per cent from the £149m recorded at the end of the first half of 2011. Revenues rose 7 per cent from £329m to £351m.

Earlier this year, M&G knocked Invesco Perpetual off the top spot as the UK’s biggest fund firm after more than four years. At the end of June the group had £39.2bn of retail funds under management in the UK. According to the group, over three years 27 retail funds, representing 84 per cent of retail funds under management, have produced first or second quartile performance.

M&G says retail flows are starting to slow having seen £1.9bn in the second quarter of 2012 - compared to £2.4bn in the first quarter. The £4.3bn recorded is a 53 per cent increase on the £2.8bn in the first half of 2011. Net inflows from the UK market stood at £2.8bn, a 28 per cent increase on 2011 levels.

M&G Investments recently revealed it is looking at ways to stem inflows into Richard Woolnough’s £6.3bn Corporate Bond and £5.1bn Strategic Corporate Bond funds. Both funds are huge favourites in the IFA market and have grown markedly in the past 12 months.

M&G’s parent group Prudential has posted a 13 per cent increase in pre-tax profit for the first half of the year of £1.3bn, as profits for its UK business remain flat. Pre-tax profit for the same period last year was £1.1bn.

Prudential’s chief executive Tidjane Thiam says: “M&G has delivered a particularly good performance in a difficult investment market, with net inflows of £4.9 bn. Once again, our high-margin retail business continues to be the driver of our strong inflows being the market leader in UK retail net flows for the 14th quarter in a row.”

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